Mideast IPO activity slumps in Q3

The initial public offering (IPO) market in the Middle East has continued to slump in the third quarter of the year, according to figures released by Ernst & Young Middle East on Monday.

A total of four companies listed in the Middle East raised $871.79 million in Q3 2009 compared to five IPOs raising $1.021 billion in the previous quarter and 14 IPOs raising $3.74 billion during the Q3 2008.

A total of $1.97 billion has been raised in Middle East IPOs in the first three quarters of 2009 compared to $12.44 billion in same period last year.

Three IPOs in Saudi Arabia and one in Syria was the sum total of activity in the region in Q3 2009 with National Petrochemical Company of Saudi Arabia being the largest regional IPO, raising $640.85 million, Ernst & Young said in a report.

Phil Gandier, managing partner, Transaction Advisory Services, Ernst & Young Middle East, said: “Companies are still wary of the strength of the recovery in the region.

"Whilst the market may not change significantly during the remainder of this year, once there is evidence of a sustained recovery in the region, there is likely to be an increase of fund-raising on the regional stock markets, and the 152 announced, delayed or rumoured IPOs would be anxious to list”.

Globally, a succession of billion dollar plus Chinese IPOs helped drive the total value of the market in Q3 2009 to $37.8 billion, an increase of 292 percent on the previous quarter.

Globally, in Q4 2009, Ernst & Young said it expected another strong quarter for the IPO market in Asia; the absence of a rapid rebound in Europe; and a cautious but substantive improvement in IPO sentiment in the US.

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