Mena IPO value rises to $349 million in Q3

dubai — The value of initial public offerings (IPO) in the Middle East and North Africa region surged by 21.9 per cent in the third quarter to $349.9 million year on year, while activity declined by 33.3 per cent, according to the latest EY Mena IPO Eye report.

“In light of fluctuating oil prices and headwinds in the economy, IPO activity in the region has been slow from the first quarter to the third quarter of 2018,” said Phil Gandier, Mena transactions leader at EY.

However, it is positive to see that IPO value increased year on year in the third quarter, especially when there had been several entities across the region delaying their plans for IPOs in 2018 due to various factors, including regulatory and global trade concerns and uncertain market conditions in a rising interest rate environment, said Gandier.

Globally, IPO activity saw a significant slowdown in the third quarter, with 302 IPOs raising $47.1 billion, marking a decrease of 15 per cent and two per cent respectively, compared to the second quarter.

“Globally, the third quarter has been a relatively quieter period for IPO activity driven by geo-political tensions, trade issues between the US and China and the looming exit of the UK from the European Union, all of which have dampened investor confidence in the short term,” said Gandier.

In Mena, Saudi Arabia led the IPO activity in the quarter with the IPO of Leejam Sports Company on the Saudi Stock Exchange, which raised $220.6 million, making it the biggest IPO in the third quarter. In the previous quarter, four companies went public, three of which were Reit listings on the Tadawul. Additionally, in the GCC region, Oman’s Muscat Securities Market (MSM) had a single IPO listing for Dhofar Generating Company in the power and utilities sector raising $52 million.

Gregory Hughes, Mena IPO Leader, EY, said while IPO performance has been slow this year, regulatory updates and inclusions in global indices have been positive for the GCC IPO market.