By Andy Sambidge
Ernst & Young says strong performance in regional market is likely to continue for rest of 2014
The IPO market in the Middle East and North Africa continued its recovery to end the first half of the year strongly, according to Ernst & Young.
Its MENA IPO Update Q2 2014 report said there was a total of 16 deals raising $2.4bn in the first six months of the year, an increase of 14 percent in both volume and proceeds on the same period in 2013.
It added that the total was the highest amount of capital raised in the first half since 2008.
In Q2, there were 11 IPOs raising $1.1bn, a 129 percent increase on the previous quarter and a rise of 22 percent compared to Q2 2013 by deal numbers, the report said.
GCC IPOs represented 90 percent of all MENA IPOs in H1, with 10 GCC IPOs raising $2.26bn which was 67 percent and 14 percent higher than H1 2013.
Saudi Arabia led the GCC activity in the first half of the year with four IPOs, followed by the UAE with three, Oman with two and Qatar with one.
Phil Gandier, MENA transactions leader, EY, said: "The IPO market is very strong across MENA, particularly among the GCC countries which continue to attract large IPOs and drive the strong performance in the region.
"In the first half of the year, the majority of IPO deals were in Q2, which is a good indication for a positive second half of the year. All the IPOs executed in Q2 2014 were within the regional market which shows a shift from the trend of international listings in the last few quarters."
Qatar’s Mesaieed Petrochemical Holding Company launched the region’s largest issue in H114 in Qatar, raising $903m in January while Saudi Arabia and Tunisia had the highest number of IPOs with four each across the first half of the year.
Gandier said the fundamentals of the Saudi economy along with the increased appetite for equities and improved valuation have contributed to a better IPO performance in the Gulf kingdom.
Activity was spread broadly across sectors in H1, with IPOs in the healthcare, power and utilities, retail, construction, oil and gas, telecommunications, leisure and tourism and industrial manufacturing sectors.
Gandier said prospects are bright for the second half of 2014, adding: "In the second half of 2014 we expect the MENA IPO market to remain buoyant with the fundamentals in place for a sustained period of strong and steady IPO activity.
"With a solid pipeline of IPO-ready businesses across a broad range of geographic markets and from multiple sectors, strong investor confidence and expected 'IPO friendly' regulatory and legal reforms in key markets, we expect an uptick of IPOs in the second half of 2014."For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.