Undaunted by the full occupancy rates posted by hotels, many aspirants to partnership in the Al-Rayan bank have resorted to sleeping in their cars since the launch of the bank's Initial Public Offering (IPO) on 15 January.

  

Local newspapers have been full of reports and pictures of the congestion which the IPO has created in the Qatari capital.

 

"Around one million applications for subscription in Al-Rayan bank have been distributed ... People are snapping up more applications than they need," said Mazen al-Shakarji, deputy director of investment at Qatar National Bank, which is managing the IPO.

 

The IPO, which closes on 29 January, is open to nationals of Qatar and its five partners in the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates (UAE).

 

Many would-be subscribers from the neighbouring states have come carrying dozens of passports of relatives or friends in order to subscribe on their behalf.

 

One Saudi woman came, carrying 200 passports, while a Bahraini woman brought 110, the daily Ash-Sharq reported.

 

Black market

 

The newspaper quoted an Omani man as claiming he had "800 passports of relatives and friends" wishing to buy shares. The subscription is taking place in a football stadium, where organisers have so far distributed some 25,000 registration tickets to would-be subscribers.

 

"Around one million applications for subscription in Al-Rayan bank have been distributed ... People are snapping up more applications than they need"

Mazen al-Shakarji, deputy director investment at Qatar National Bank

This has given rise to black market, according to subscribers, who say some tickets have been sold for more than 1000 rials ($275) to those too impatient to queue up.

 

The Interior Ministry has set up an operations room "equipped with the most modern gadgets and technology to bring under control anyone who disrupts public order" during the subscription, Ali Said al-Braidi, the officer in charge of security, told local newspapers.

  

Al-Rayan, which is being established with a capital of 7.5 billion rials ($2 billion) is offering 412.5 million shares valued at 4.125 billion rials ($1.13 billion), or 55% of the total capital.

  

Shares are priced at a mere 10 rials ($2.7) each, the same price at which shares of other newly established Qatari companies were sold and which increased up to eight fold as soon as they were traded.

  

The biggest bank?

 

But Shakarji poured cold water on subscribers' expectations that Al-Rayan was set to become "the biggest Islamic bank in the Gulf and Arab world".

  

"I don't think a bank can become 'the biggest' as quickly (as subscribers expect). It (Al-Rayan bank) is a good one, but it will need time before it becomes the largest," he told AFP.

 

Traders on the Qatari stock exchange made huge gains over the past year before share prices declined in recent weeks. Experts attribute the drop to the eagerness to enter the IPOs of newly established companies, which prompted people to sell shares to buy into the new firms.

  

Many recent IPOs in the region have been many times oversubscribed. Thousands of Saudis flocked to the UAE last year to buy shares in a regional gas firm.