Mena firms raise $788M via 16 IPOs in H1 of 2017
dubai — The number of IPOs issued in the Middle East and North Africa (Mena) in the first half of 2017 doubled as compared to the same period last year. The number hit a 10-year high while the value of capital raised by companies fell by nearly one-fifth.
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.
According to Mayur Pau, Mena financial services IPO leader, EY, the 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 governmentowned 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 to the regional market are by Adnoc, Aramco, Sanaat, Gems Education, Abu Dhabi Ports and Emirates Global, according to Bloomberg. Excluding Aramco, six deals could raise as much as $11 billion over the next few quarters through IPOs. Aramco plans to raise over $100 billion through multiple listings.
In the GCC, the number of IPOs increased 33 per cent but the value of funds raised by firms decreased by six 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 the highest activity among regional bourses with 16 firms raising $200.5 million (Dh735.8 million).
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. Emirates NBD Asset Management raised $105 million by listing its Reit on Nasdaq Dubai.
During H1 2017, the highest capital was raised in the oil and gas sector with one deal announced at a value of $243.5 million, followed by the construction industry with one deal valued at $135 million. The third most valuable IPO by capital raised was in the real estate investment trust sector at $105 million for one deal.
— waheedabbas@khaleejtimes.com