MidEast IPO value up twentyfold in Q1

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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