EY: Mena IPO activity gains pace in Q3 with five listings

The Mena region recorded five IPOs in the third quarter of this year, up from a single listing in the same period last year and more offerings are expected thanks to the recovery in oil prices, consultancy EY said yesterday.

The value of IPOs in the third quarter rose 20 per cent to US$236.7 million from a year-earlier period, led by three offerings on the Saudi Stock Exchange or Tadawul, EY said. “Many private equity-backed and family groups continue to assess the IPO market and are working on readiness for attractive IPO opportunities,” said Mayur Pau, EY Mena Financial Services IPO Leader.

“In particular, the UAE, Saudi Arabia and Egypt have a strong pipeline of announced and rumored IPOs, with a strong backlog of IPOs potentially preparing to come to market in the last quarter of 2017 and early 2018.”

The largest IPO in the third quarter was Saudi Arabia’s Musharaka Reit (real estate investment trusts) Fund, which raised $95.1m, followed by Zahrat Al Waha for Trading, which raised $62m, and Al Maather Reit Fund, valued at $49.7m.

Oman’s Muscat Securities Market had two IPOs after a two-year drought: Al Ahlia Insurance Company which raised $19.5m and Vision Insurance which fetched $10.4m.

“The Mena IPO market outlook is positive against the backdrop of increasing stability in oil prices, improving investor confidence in the global markets and a strong desire to raise funds through privatisation, resulting in a large pipeline of companies potentially preparing to come to market,” said Gregory Hughes, EY Mena IPO leader.

“Based on the pipeline of IPOs, we expect to see a number of premium government or partially government owned assets being floated over the next two years, particularly in the energy-related sector.”

A greater number of Reits are coming to the market in the Arabian Gulf.