Going strong
Regional IPO activity witnessed significant growth last year, notes Zainab Mansoor
The year 2021 proved to be a momentous one for the regional IPO market. According to an EY report, the Middle East and North Africa (MENA) region recorded 21 IPOs last year, raising $7.9bn, marking a 133 per cent surge in total issuances and a 325 per cent rise in total proceeds compared to 2020. Meanwhile, 13 listings took place across MENA markets in the last quarter of 2021, which raised $5.6bn in proceeds. Saudi Arabia’s ACWA Power proved to be the largest IPO in MENA for 2021, raising $1.21bn, the report revealed. This was followed by ADNOC Drilling Company’s listing on the Abu Dhabi Securities Exchange (ADX) which secured $1.1bn, making it the MENA region’s second largest IPO in value in 2021. Saudi Tadawul Group also listed last year, making the kingdom’s stock exchange the third publicly traded bourse in the GCC after Dubai Financial Market and Boursa Kuwait.
The IPO market had a banner year globally as well. With a total of 2,388 deals
“TECHNOLOGY, HEALTHCARE AND INDUSTRIALS LED LAST YEAR’S SECTOR IPO ACTIVITY, WHILE THE NUMBER OF UNICORN IPOs MORE THAN DOUBLED IN 2021, REACHING 79 IN DEAL NUMBERS, AND $83BN IN PROCEEDS”
THE MIDDLE EAST AND NORTH AFRICA REGION RECORDED 21 I POs LAST YEAR, RAISING $7.9BN, MARKING A 133% SURGE IN TOTAL ISSUANCES
raising $453.3bn, 2021 became the most active year for IPOs in the past two decades, up 64 per cent in deal numbers and 67 per cent by proceeds year-on-year. EMEIA (Europe, the Middle East, India and Africa) exchanges posted the highest growth in IPO activity among all regions, marking a 158 per cent increase in numbers and 214 per cent rise by proceeds, the report suggested. Meanwhile, technology, healthcare and industrials led last year’s sector IPO activity, while the number of unicorn IPOs more than doubled in 2021, reaching 79 in deal numbers, and $83bn in proceeds, compared to 31 listings which raised $31.6bn in 2020.
KEY INITIATIVES
Several initiatives have been introduced in recent times to bolster regional equity markets. A Dhs5bn Abu Dhabi IPO fund was launched last year to incentivise private sector companies to list on ADX, while the UAE’s Securities and Commodities Authority approved the GCC’s first Special Purpose Acquisition Company (SPAC) regulatory framework in January. Last month, Abu Dhabi-based ADQ partnered with Chimera Investments to launch the UAE’s first SPAC on ADX.
Dubai also announced the listing of 10 government and state-owned companies on the DFM last year. Dubai Electricity and Water Authority (DEWA) recently issued nine billion shares, raising $6.1bn, making it the largest IPO in the UAE and the world’s second largest ever in the Middle East. DEWA, which started trading last month, offered 18 per cent of its stake in the IPO. Furthermore, ADX, Boursa Kuwait and Kuwait Clearing Company also signed a cooperation agreement earlier this year to broaden investment opportunities. Boursa Kuwait Securities also reportedly plans to add derivatives and futures products to ramp up liquidity and incentivise companies to list. With several companies announcing their listing plans and key initiatives taken to bolster capital markets, the region’s IPO book for the imminent future looks promising.