The decline in stocks of « NOMW» companies from the public offering price weakens the trust of dealers

​               Financial analists pointed that the recurrence of the large scale decline scenario for companies on the parallel market " NOMW" when listed, is a negative indicator of market performance after two companies fell in the first two days by 30 per cent at the listing, stressing the need to re-evaluate the share price upon listing In addition to the issuance, to reduce the pressure on the stock at the listing, open the parallel market for all and not limited to qualified.
Anas Al Rajhi, a financial analist, said that the low public offering price for companies that were recently launched in the parallel market "NOMW" is a negative indicator of the market performance, pointing out that two companies declined more than 30% of the subscription price during the first and second sessions of the listing. Will affect the market, so the market will become attractive to new subscribers and will affect the reputation and confidence of the dealers of theses.
Al Rajhi attributed this to several things, exaggerated in valuing the propositions because it offers a high profit rate of more than 20 times, which is an increasing price rather than an attractive one compared to the main market propositions with seven times profitability. Ten years, so public offering valuation is overpriced, and another is that the "NOMW" market allows founders to sell from the first day of listing for those who own less than 5 per cent of shares. "The exit process is not supposed to take place particularly quickly and the market is attractive. Market dealers do not trust new companies, very modest capital, and have little experience in the market, and so far there is little trust in growth companies.
Muhamed Al Shammimri, a financial analist, said that the growth market is still immature, and that its customers are limited. The volume of liquidity has weakened. Therefore, the participants are selling for the first day of listing. The pressure on the price is strong. The market is limited to qualified individuals. It is natural that there will be a big decline, especially that the traders view of the value of the price and not the basic value. They see that the value of the shares offered is high, but at the highest estimate, the pricing was on the assets and distributions of the company, but what the market is experiencing now is that it is an immature market and needs even a long time It is complemented by maturity and open to all.
Al Shammari stressed that the subscription should be at the very least and avoid the high prices of the stock, so as not to be subject to pressure, as happened with two companies that finally included and lost more than 30% of the public offering price and the need to adjust some regulations and observations until the performance of the market is up.
Eiad Madani, a financial analist, explained that the two companies that have been included in the latter have gone through the same scenario. The pressure on the stock has increased to a large extent and has continued to fall. This is a negative indicator for traders and companies in the future performance of the market.
"The concerned authorities and the Capital Market Authority must take note of some of the observations and take them into account, so that the market can rise, continue and improve, including opening the market for all to trade and re evaluating the price appropriately for the market and its performance so that there is no pressure on the stocks."