UAE, Saudi IPO pipeline for H2 2017

The number of IPOs in the first-half of 2017 doubled, hitting 10-year high while the value of capital raised by the companies fell nearly one-fifth as compared to same period last year in the Middle East and North Africa (Mena).

The companies raised $788 million (Dh2.9 billion), a decrease of 21 per cent, through 16 initial public offerings (IPOs) during the period, according to global consultancy firm EY figures released on Tuesday.

According to Mayur Pau, Mena Financial Services IPO Leader, EY, increasing stability and confidence in the global economy and markets are likely to drive increased IPO activity in 2017 and 2018 across Mena, with a strong backlog of companies potentially preparing to come to market.

"The UAE, Saudi Arabia and Egypt look particularly strong in terms of announced and rumoured IPOs. The key driver for the Mena IPO market will likely be the privatisation of leading government-owned assets across a number of sectors, particularly the energy sector, as Mena governments seek to raise capital," Pau added.

Among the major IPOs that could come in to the regional market are by Adnoc, Aramco, Sanaat, Gems Education, Abu Dhabi Ports and Emirates Global, according to Bloomberg. Excluding Aramco, 6 deals could raise as much as $11 billion over the next few quarters through IPOs. Aramco plans to raise over $100 billion through multiple-listing.

In the GCC region, the number of IPOs increased 33 per cent but the value of funds raised by firms decreased by 6 per cent in H1 2017. In total, 13 firms raised $700 million during H1 2017 as against the same period last year.

Saudi Arabia's parallel market Nomu witnessed highest activity among regional bourses with 16 firms raising $200.5 million (Dh735.8 million) through the listing.

The greenfield IPO of Orient UNB Takaful in Q2 of 2017 represents the first IPO on the Dubai Financial Market since the IPO of Dubai Parks and Resorts in 2014. The company raised $16.3 million. While Emirates NBD Asset Management raised $105 million by listing Reit on Nasdaq Dubai.

"Increasing stability in oil prices and confidence in the global economy and markets are likely to drive an increased IPO activity in 2017 and 2018 across Mena, with a strong backlog of companies potentially preparing to come to market.The key driver for the Mena IPO market will likely be the privatisation of leading government-owned assets across a number of sectors," said Gregory Hughes, IPO leader, EY Mena.

During H1 2017, the highest capital was raised in the oil and gas sector with 1 deal announced at a value of $243.5 million, followed by construction industry with 1 deal valued at $135 million. The third most valuable IPO by capital raised was in the real estate investment trust at $105 million for 1 deal.

Source: Khaleej Times