Mideast IPO activity slumps at end of 2008

Initial public offering (IPO) activity in the Middle East has declined in the last two months amid the global downturn, Ernst & Young said on Sunday.

Regional IPOs in Oct–Nov 2008 raised a total of $22.4 million from three IPOs compared to $6 billion raised from 10 IPOs in the same period in 2007, according to the accounting firm’s year-end IPO Update.

“Investor confidence and willingness to list have clearly been affected by current market conditions,” said Azhar Zafar, head of Mergers & Acquisitions, Ernst & Young Middle East.

Despite the drop in listings, Zafar said, the number of companies preparing for IPOs remained “robust. “This reflects the new corporate understanding that the journey to an IPO is a transformational process,” he said.

On Sunday it was reported that Dubai-based Nakheel was in talks with investment bankers about plans to float the company in 2009.

According to the UK’s Sunday Telegraph, bankers at JP Morgan have been working on various ideas for the IPO, including a dual-listing for Nakheel on its home exchange, Nasdaq Dubai, and also in London.

During 2008, Saudi Arabia, the UAE and Egypt were the top three markets in terms of capital raised accounting for 78 percent, 10.3 percent and 4.7 percent respectively.

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