The economic and health situation the world experienced during the last period led to a significant decline in the economic activity in general. This condition has resulted in a significant fall in public shareholding institutions and companies in local stock exchanges, including the Gulf stock exchanges.
The same has happened in several other countries in the Middle East and North Africa. According to the data of the Ernst & Young report for the first half of the current year 2021, four deals were registered for listed companies with a total value of $425.8 million, a fall of 48 per cent compared to the same period last year.
This indicates that the Middle East region needs a longer period of time for the movement and activity of establishing and listing companies on stock exchanges to return to its previous era.
Today many companies operating in various sectors suffer due to the losses due to the outbreak of the pandemic, as well as from oil prices, which ranges from $60 to 70. The oil prices depend on the industrial activity in the world, and the weather and environmental conditions.
The first quarter of 2021 witnessed slow activity in the number of underwriting deals, with only three deals registered in the Middle East and North Africa, while the second quarter witnessed the registration and listing of only one deal worth $131 million for an Egyptian company.
Globally, IPOs witnessed a distinguished activity in the first half of this year, as 597 IPOs were registered in the second quarter, with total amount of $111.6 billion, an increase of 206 per cent in terms of number of deals and 166 per cent in terms of value compared to the second quarter of 2020. This indicates that the world has begun to erase the negative effects of the pandemic, and is also attributed to the economic and commercial stimulus policies provided by global governments to maintain the movement of economic activity and support business owners to continue their business.
The second quarter of this year was also more active in terms of number of deals and their returns over the past twenty years, breaking the previous record set in the second quarter of 2007, through 522 subscriptions worth $87.6 billion.
Head of deals and strategy advisory services in the Middle East and North Africa at Ernst & Young believes that a number of Gulf countries are on a date to offer their shares for public subscription during the coming period, which represents a glimmer of optimism in the region in light of the continuous improvement and economic stability of the post-pandemic conditions, in addition to the improvement in international oil prices since the beginning of this year, which helps companies to discover new paths in manufacturing and production processes, and then go towards listing.
The observer of the financial markets in the region believe that the area suffers from a lack of liquidity, and therefore those who wish to activate their activities in the money market cannot activate despite the fact that the level of listings is attractive to purchase and to enter into stock and bond deals, some of which are sold at prices lower than their nominal value.
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