GCC IPO proceeds drop 54% in 2023

Total proceeds from initial public offerings (IPOS) in the GCC countries dropped by 54% to $10.79bn in 2023 from $23.38bn in 2022, according to a new research report.

After witnessing strong activity throughout 2022, major GCC stock exchanges remained active, with listing momentum in terms of IPO numbers in 2023. However, issuance proceeds dropped even as the MSCI GCC gained for the year.

The total number of IPOS in the GCC declined marginally to 46 issuances in 2023 from 48 issuances in 2022, according to the report released by Kuwaitbased Kamco Investment.

Saudi Arabia continued its leadership position for IPO issuances from the region in 2023, as 35 out of the 46 GCC IPOS debuted on either the Nomu or Tadawul. Within Saudi Arabia, the Nomu – Parallel Market dominated the number of issuances with 27 deals, compared to 8 deals for the Main Market.

The UAE continued its domination in terms of IPO proceeds, raking in almost 56.3% of the issuance proceeds at around $6.07 billion from its 8 listings on UAE exchanges in 2023. The average listing size of IPOS on UAE exchanges was approximately $759mn, significantly higher than the rest of the GCC'S average listing size of $124mn.

The pipeline from GCC IPO candidates in 2024 suggests that a repeat is not out of reach, as mentioned by the report.

'The backdrop for IPOS from 2023, such as interest rates, geopolitics, secondary stock market volatility, and oil price volatility, will continue to remain crucial in 2024. The pipeline for 2024, based on our estimates at the start of 2024, ranges around 28-30 companies between announced, mandated, and rumored GCC IPO issuances, suggesting that a repeat of 2023 is possible, as similar estimates were available the previous year,' Kamco Investment said.

However, if trends from 2023 were to repeat, Kamco Investment also believes that issuance proceeds will be dominated by a fewer number of larger issues, while several smaller IPOS should debut on the markets, such as the Nomu.

Furthermore, Kamco Investment expects sectoral participation to be diverse, similar to trends witnessed in 2023.

Total number of IPOS in the GCC dropped marginally to 46 issuances in 2023 from 48 issuances in 2022