In the first half of 2017, MENA IPO activity witnessed 16 deals, representing a 100 per cent increase when compared to the first half of 2016. Announced MENA value, or capital raised, reached $788 million in H1 2017, a 21 per cent decrease from H1 2016. H1 2017 was the most active first half of the year by number of IPOs since H1 2007, leading multinational professional services firm EY.
Out of the 16 IPOs, nine IPOs worth $200.5 million were from companies listed on the Saudi NOMU market.
The cross-border IPO of ADES International Holding Ltd raised $243.5m on the London Stock Exchange and was the largest IPO of a MENA company, by capital raised, year-to-date.
Gregory Hughes, EY MENA IPO Leader, says: “Increasing stability in oil prices and confidence in the global economy and markets are likely to drive an increased IPO activity in 2017 and 2018 across MENA, with a strong backlog of companies potentially preparing to come to market. The key driver for the MENA IPO market will likely be the privatisation of leading government-owned assets across a number of sectors.”
The greenfield IPO of Orient UNB Takaful PJSC (Orient UNB) in Q2 of 2017 represents the first IPO on the Dubai Financial Market (DFM) since the IPO of Dubai Parks and Resorts in 2014.
The GCC saw 13 IPOs raised in the first half of 2017, a 33 per cent increase on the deals announced for the same period last year. However, deal value declined by 6 per cent to $700 million in H1 2017 when compared to H1 2016.
The highest capital raised in the first half of 2017 was in the oil and gas sector with one deal announced at a value of $243.5 million. The construction industry followed with one deal valued at $135 million. The third most valuable IPO by capital raised was in the real estate investment trust (REIT) at $105 million for one deal.
In the first half of 2017, oil prices continued to fluctuate between $45 and $55 per barrel as the initial effect of agreed oil production cuts by Opec and non-Opec members continue to be impacted by ongoing market factors, resulting in a downward trend toward the end of Q2 2017. However, the continued drive for privatisation across MENA countries is likely to result in an increase in the number of IPOs on exchanges.
Oman Observer is now on the WhatsApp channel. Click here
