MidEast IPO value up twentyfold in Q1

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The value of initial public offerings (IPOs) on Middle East bourses increased by twentyfold in Q1 2013, compared to the year ago quarter, according to a report by Ernst & Young.

During the first three months, regional capital markets recorded $1.6bn in proceeds from three IPOs, up from $339.8m across four IPOs in the first quarter of 2012.

The vast majority of these proceeds came from Asiacell Communications’ $1.3bn listening on the Baghdad bourse this year. The other deals were both from Saudi Arabia, with Northern Region Cement Company raising $240m and National Medical Care Company floating for $97.2m.

“The majority of the value is attributed to a large ticket telecommunications IPO in Iraq,” commented Phil Gandier, MENA head of transaction advisory services, Ernst & Young.

“This sector is traditionally associated with large value transactions and the high Q1 performance will be sustainable if we start to see similar large value transactions on a regular basis which would bolster the regions capital markets."

IPO activity in the UAE, home to three stock exchanges, has been muted since the financial crisis hit in 2008-2009. The last offering in the Gulf state was contractor Drake & Scull International which floated in mid-2008.

A spokesperson for KPMG in February told Arabian Business that at least five Gulf-based companies were preparing stock market flotations for 2014, including one worth nearly $1bn.

Dubai-based developer DAMAC Properties is said to be currently mulling a regional offering.

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