Major GCC IPOs on anvil in 2018

MUSCAT: With oil prices recouping, several companies have announced their plans of going public, estimating that liquidity will improve in the coming period, which might channel into equity markets. As per the information available (announced or rumoured in the media), more than 30 companies (excluding REITs) are expected to go public in 2018, majority of them on local markets and few big names are yet undecided where to list.
Saudi Arabia and UAE are expected to be the biggest contributors, with a number of announced and rumoured IPOs in the pipeline.
The year is also expected to witness mother of all IPO’s i.e. Saudi Aramco. The progress on the IPO has been relatively slow mainly because of the development related to where to list the IPO of that big size. Other big names, which are expected to hit the market, are: Abu Dhabi Ports, Emirates Global, Aramco, Senaat, Gems Education, Property Management Unit of Dar Al Arkan, ACWA Power Saudi, Kuwait Stock Exchange and some power companies in Oman.
Amongst these names also, some are contemplating to list on foreign markets as well.
We believe early 2018 would be an opportune time for the companies to go public as oil prices would continue to remain higher supported by output cuts. Later on, we expect shale producers to bounce back with higher production and drag the oil prices down. As per Opec report, Shale producers in the US have managed to lower their breakeven costs by 30-50 per cent in 2015-17, by improving technology and efficiency.
IPOs in 2017
The GCC IPO market activity gained momentum in 2017 buoyed by a general improvement in market conditions and investor confidence in the region. The number of IPOs almost doubled in 2017 when compared with 2016. The year 2017 has shown a significant increase in the number of IPOs in the GCC, with 18 offerings compared to 5 in 2016. Furthermore, proceeds raised during 2017 were a whopping 252 per cent higher compared to 2016 in spite of some low value IPOs listed on Saudi’s NOMU parallel market in 2017. [Credit: U-Capital]