Sunday, September 25, 2005

The "riot factor" 

Almost exactly ten years ago, I watched one of the most successful investment bankers on Wall Street mesmerize the CEO of a company that wanted to go public. The banker looked deeply into the CEO's eyes and said that there was some chance that "the riot factor" would kick in and demand for his company's stock would far outstrip its availability. Seasoned securities lawyer that I was, I choked off a guffaw, but the CEO's eyes bulged as he imagined what "the riot factor" might be and the investment banker got the deal.

This, ladies and gentlemen, is what "the riot factor" looked like yesterday in Abu Dahbi, as investors literally struggled to get an allocation of shares in the initial public offering of Dana Gas.
Pandemonium erupted in banks across the UAE yesterday as thousands of investors many of them Saudis queued up for hours in the hot sun outside banks, seeking to apply for the Dana Gas IPO....

The Saudis many with their families yesterday flooded bank branches to buy the shares.

Several banks had to close their doors to control the crowds and some banks reported scuffles as the crowds struggled to get to the counters.

At least one incident was reported in which a security guard was roughed up.

"We had to wait for hours in the hot sun, and then had the doors shut in our faces," complained a disgruntled Saudi. "This is no way to treat human beings."

And that's a topic that wealthy Saudis know something about.

CWCID: The always interesting Emirates Economist.


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