* Bank Nizwa meeting on Thursday did not have required
* Lender raised $156 mln from Muscat IPO
* Shares trading below IPO price after initial surge
* Another Islamic lender Al Izz also planning IPO
By Dinesh Nair
DUBAI, June 24 Oman's Bank Nizwa, a
newly-formed Islamic lender which sold shares to the public in
June, failed to elect a new board after it was unable to get the
required quorum at a general meeting last week, three sources
familiar with the matter said.
Bank Nizwa, the sultanate's first Islamic bank, attracted
681 million rials ($1.77 billion) of bids in its initial public
offering, 11 times the sum it planned to raise, signalling
strong interest from investors.
The lender held a Constitutive General Meeting on June 21 to
elect its board of directors and approve the bank's articles of
association and memorandum of understanding.
Votes representing 75 percent of the bank's capital were
required to proceed with the meeting but only 62 percent of the
voting rights could be arranged, the sources said.
"This is a big blow for the bank. They needed the approval
to go ahead and appoint a board and a sharia committee. Now they
have to wait for the next meeting to get approval," one banking
The failure to elect a board delays the start of banking
operations and casts a pall over another upcoming Islamic bank
IPO. Sharia-compliant lender Al Izz International Bank has been
expected to issue an IPO of 40 percent of its 100 million rials
capital by June this year.
Bank Nizwa was not immediately available for comment. Calls
to the bank's legal advisor were not answered.
The lender raised 60 million rials ($155.9 million) in the
40-percent IPO. Its shares surged 13 percent on its first day of
trading on June 10 but the early gains waned and the stock has
returned to its 102 baisas offering price.
While neighbouring Gulf states have ramped up Islamic
finance services in recent years, Oman stood out by refusing to
participate in the industry. The central bank reversed that
stance last year, partly to prevent the outflow of Islamic
Bank Nizwa was the first IPO this year in Oman. The
country's market regulator has said it expected three to four
new listings in 2012.
Oman Arab Bank, the banking arm of Oman International
Development and Investment Co (Ominvest), has delayed
its initial public offering until September, Oman News Agency
said earlier this month.
Bank Nizwa shares were flat at 102 baisas on the Muscat
bourse on Sunday, after dropping to 100 baisas earlier in the
($1 = 0.3850 Omani rials)
(Reporting by Dinesh Nair; Editing by Amran Abocar)