IPO on ASE 2
It shouldn’t be that hard
It’s been a record breaking year for IPOs worldwide1, a year similar to that of 2007, just before the Great Financial Crisis.
The Amman Stock Exchange however still has not been able to perform and it has been going through a dry spell the last decade. The scene amongst VC firms has been quite the opposite, with a lot of Jordanian companies raising record amounts or closing successful exit deals.
My first newsletter on IPOs on ASE has been a hit amongst fund managers, so here is an additional (free) list for potential Jordanian companies to IPO on ASE
Let’s get this out of the way first. Jordan is one of the driest in the world. The country has witnessed a sever drought this year. This sector is similar to that of the energy sector: heavily in debt. An IPO of the water utility company will help to raise fresh funds to secure vital projects (hydroelectric power from dams, Red-Dead project etc.)
Ticker suggestion: WATA, JAFA, MAFI
Jordan is not home to high growth potential stocks. But one company that I think could grow at a reasonable pace, not only in Jordan, but also internationally, is Hamada, the Foul & Hummus place. It could use the funds to expand and/or start a franchising deal across the Kingdom as tourists would feel safer knowing of a highly reputable place when visiting smaller towns.
With the rise of “Veganism” to fight off climate change, chickpeas can be seen as a reliable substitute source of protein. The hummus chain can expand worldwide capturing the growing vegan market share and trend (for those who didn’t know, the largest seller of Middle Eastern food, mainly hummus, in the USA, is an Israeli company2)
It can also attract ESG investors if it grows its chickpeas sustainably and recycles its vegetable oil and uses it towards biofuel.
Ticker suggestion: HMDA, FOOL
It is no secret that a certain American fast food chain in Jordan went (unfortunately) bust. Many of its locations are still standing, and of course empty. What Jordan is missing is a large group of fast food chains packaged into one. They would also have to be Jordanian names.
In the USA, they have YUM ($YUM:NYSE, market cap $38 billion). The group includes famous brands such as KFC, Pizza Hut and Taco Bell.
So why not combine famous local brands such as: Day3a (Shawerma), Chilli House/Ways (burgers) and Quick Meal (chicken)? Other names can be included.
Use of funds: local and international expansion. Use the vacant stores abandoned by previous chain.
Ticker suggestion: ZAKI
There is, without a doubt, growing demand both locally and regionally for solar cells as well as solar heating. Energy independence is key for any nation and any household. And Climate Policy targets will push demand up for such modules.
A merger of Hanania Solar (solar heating) and Philadelphia Solar (solar PV) would create an industrial powerhouse in the region. They could both work together to create a Solar PV/Heat hybrid3 module that could fit on every roof.
Ticker suggestion: SOLR, SHMS
The information technology sector needs a champion to inspire other companies to keep growing. Jordan was way ahead in IT but is losing to rival companies in the GCC. I’ve spoken about a potential IPO for a fintech firm in Jordan in the first newsletter (Progressoft) but a company that focuses on building SaaS is what is needed here.
Eskadenia should take the lead here. It could use the funds to acquire many smaller firms to expand its scope of service.
Ticker suggestion: LQWT, ESKD
With over 50% market share, $20 million in sales, RZ is one of the biggest manufacturers of food packaging.
Ticker suggestion: FOIL, RZJO
CCC is a giant engineering firm that had similar beginnings as Arab Bank. Also, wherever CCC went to do a project, the Arab bank followed. Arab Bank is now a household name and the largest in terms of market cap in the Amman Stock Exchange. Having CCC IPO in Jordan (government should entice them with some benefits) would allow the company to relocate to Amman from Athens.
There are still a lot of projects in the pipeline to be implemented in the Arab world… there is no excuse for them not to move back.
Ticker suggestion: CCCC
The Jordanian investment landscape is really special: one one side of the street you would see a burgeoning profit making entity, while on the opposite side lies a dilapidated business.
This is the case of Abdoun Mall (and on the other side is Taj Mall covered here). There have been many suggestions to turn it around. Some included an entertainment centre. My favourite was turning it into a one stop shop for (as they called it) “housewives”: you would find all your shopping needs as well as your cobbler, tailor, electrician, and other fixing needs.
I would consider taking it a bit further: turn it into a Jordanian only IKEA. Have all furniture and other items (made in Jordan) displayed.
Ticker: ABDN (since MALL is already taken)
A lot can be said about this company. They have tried crowdfunding in the past. So this could their opportunity to shine especially when a local publicly traded textile manufacturer went bankrupt (CJC).
Ticker: BEDU, JBDU
Aqaba Star Trek Hotel
During the 2020 lockdown, I watched only 1 series from beginning to end: Star Trek (the one they used to put on JTV2).
When I heard they wanted to do an inspired Star Trek hotel a decade ago4, I was more than happy. Then the Arab Spring started and a lot of projects in Jordan got derailed.
The original design thought up by Rubicon was not very inspiring.
I say take it even further, build a large hotel that looks like the Enterprise ship. All rooms will have only the show playing. A cinema showing only the movies. A Ten Forward lounge and a Holodeck room for games.
I’m sure this could attract all Trekkies around the world, making it their Disney land.
Ticker suggestion: STAR, TREK
To all brokers and fund managers on this newsletter, please do something (other than complaining). The ASE needs it.
Hope you enjoyed this, and if you have any other companies to suggest, please do so in the comments.