The retail portion of the initial public offer of Saudi Company for Tools and Hardware (Saco) has been covered 620 per cent, its financial adviser said.

Saco, a popular supplier of building tools and mechanical equipment in the kingdom, offered 2.88 million shares to individual investors after selling 4.32 million shares last month to institutions. In total, its flotation raised around SR504 million ($134.4 million).

Earlier this week, shares in Saudi Arabia's Middle East Paper Company started trading after the company's own IPO, surging their daily 10 per cent limit for two sessions in a row.

In an attempt to reduce the volatility around IPOs, Saudi Arabia's market regulator is bolstering the funds sector and encouraging the creation of institutional funds focused on the primary share market.  - Reuters