MENA IPO momentum continues in Q1 with 10 IPOs raising $3.4 billion
Published: 03:05 PM,May 10,2023 | EDITED : 07:05 PM,May 10,2023
BUSINESS REPORTER
MUSCAT, MAY 10
IPO activity in the MENA region retained strong momentum despite the weaker global sentiment, according to the EY MENA IPO Eye Q1 2023 report. The quarter saw 10 IPOs with the combined proceeds of $3.4 billion. This represents a 33% drop in the number of listings and a 14% decrease in value compared with Q1 2022.
Globally, Q1 2023 saw a total of 299 IPOs, raising $21.5b – a 61% decrease in volume year-on-year (YoY). This follows the trend for 2022, when IPO-bound companies and investors faced ongoing macroeconomic and geopolitical uncertainties, exacerbated by stress in the global banking system. IPO windows are short, and funding conditions are getting tougher, with investors prioritizing value over growth.
The MENA region, however, remains buoyant, with a promising pipeline for the rest of the year, driven by various enabling initiatives, such as the Abu Dhabi IPO Fund (ADIPOF). Six companies in the Kingdom of Saudi Arabia (KSA) have announced their listing plans on the Saudi Exchange (Tadawul) Main Market. These include Ghida Al-Sultan Company, Foods Gate, Meyar Construction Co, Saudi Lime Industries Company, First Mills Company and HyperPay.
Volatility experienced in the MENA equity market during 2022 continued into Q1 2023 due to rising interest rates, inflation concerns, unexpected global banking turbulence and geopolitical uncertainties, which has impacted investor sentiment. At the end of the quarter, six out of the 10 MENA IPOs had a positive return compared to their IPO price, with Presight Al Holding PLC achieving the highest gain of 146.3%.
Brad Watson, EY MENA Strategy and Transactions Leader, says: “Q1 2023 proved MENA IPOs continue to go against global trends in these uncertain economic times, building on the momentum from last year. 2023 shows a healthy pipeline across the region, with several initiatives to support private and government entities on their path to IPO.”
KSA was the frontrunner in listing activity in Q1 2023. This included six IPOs on the Nomu – Parallel Market with proceeds of $0.7b as well as one Real Estate Investment Trust (REIT) raising $0.1bn.
In the UAE, Abu Dhabi Securities Exchange (ADX) had the largest IPO of the quarter globally, with ADNOC Gas PLC raising $2.5 bn. The IPO was oversubscribed 58 times, with its first closing day share price trading 19% higher than its listing price of AED 2.37.
The IPO of Abraj Energy Services SAOG, Oman’s largest oilfield services provider, raised $0.2 bn on the Muscat Stock Exchange (MSX) and was oversubscribed 8.7 times in the MENA region. In addition, the Qatar Stock Exchange (QSE) welcomed a direct listing by Damaan Islamic Insurance Company.
Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, says: “Despite the 33% YoY decline in the number of IPOs in Q1 2023, MENA IPO and trading activity remained robust, proving the strength of investor confidence in the region against global financial headwinds. Saudi Arabia is still the most active market in terms of volume, while the largest IPOs continue to be dominated by the energy sector. Q2 2023 is already off to a strong start with a number of announced regional listings.”
MUSCAT, MAY 10
IPO activity in the MENA region retained strong momentum despite the weaker global sentiment, according to the EY MENA IPO Eye Q1 2023 report. The quarter saw 10 IPOs with the combined proceeds of $3.4 billion. This represents a 33% drop in the number of listings and a 14% decrease in value compared with Q1 2022.
Globally, Q1 2023 saw a total of 299 IPOs, raising $21.5b – a 61% decrease in volume year-on-year (YoY). This follows the trend for 2022, when IPO-bound companies and investors faced ongoing macroeconomic and geopolitical uncertainties, exacerbated by stress in the global banking system. IPO windows are short, and funding conditions are getting tougher, with investors prioritizing value over growth.
The MENA region, however, remains buoyant, with a promising pipeline for the rest of the year, driven by various enabling initiatives, such as the Abu Dhabi IPO Fund (ADIPOF). Six companies in the Kingdom of Saudi Arabia (KSA) have announced their listing plans on the Saudi Exchange (Tadawul) Main Market. These include Ghida Al-Sultan Company, Foods Gate, Meyar Construction Co, Saudi Lime Industries Company, First Mills Company and HyperPay.
Volatility experienced in the MENA equity market during 2022 continued into Q1 2023 due to rising interest rates, inflation concerns, unexpected global banking turbulence and geopolitical uncertainties, which has impacted investor sentiment. At the end of the quarter, six out of the 10 MENA IPOs had a positive return compared to their IPO price, with Presight Al Holding PLC achieving the highest gain of 146.3%.
Brad Watson, EY MENA Strategy and Transactions Leader, says: “Q1 2023 proved MENA IPOs continue to go against global trends in these uncertain economic times, building on the momentum from last year. 2023 shows a healthy pipeline across the region, with several initiatives to support private and government entities on their path to IPO.”
KSA was the frontrunner in listing activity in Q1 2023. This included six IPOs on the Nomu – Parallel Market with proceeds of $0.7b as well as one Real Estate Investment Trust (REIT) raising $0.1bn.
In the UAE, Abu Dhabi Securities Exchange (ADX) had the largest IPO of the quarter globally, with ADNOC Gas PLC raising $2.5 bn. The IPO was oversubscribed 58 times, with its first closing day share price trading 19% higher than its listing price of AED 2.37.
The IPO of Abraj Energy Services SAOG, Oman’s largest oilfield services provider, raised $0.2 bn on the Muscat Stock Exchange (MSX) and was oversubscribed 8.7 times in the MENA region. In addition, the Qatar Stock Exchange (QSE) welcomed a direct listing by Damaan Islamic Insurance Company.
Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, says: “Despite the 33% YoY decline in the number of IPOs in Q1 2023, MENA IPO and trading activity remained robust, proving the strength of investor confidence in the region against global financial headwinds. Saudi Arabia is still the most active market in terms of volume, while the largest IPOs continue to be dominated by the energy sector. Q2 2023 is already off to a strong start with a number of announced regional listings.”