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Wed 7 Nov 2012 05:07 PM

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Gulf IPOs up in 2012 despite Q3 slowdown

PwC report says IPO activity up 148% so far this year; prospects high for 2013

Gulf IPOs up in 2012 despite Q3 slowdown
(Photo for illustrative purposes only)

IPO activity in the Gulf region is 148 percent higher so far in 2012 compared to the first three quarters of last year despite a slowdown in Q3, PricewaterhouseCoopers said on Tuesday.

It said lower available trading days and activity on the regional exchanges meant the only listing witnessed in Q3 was that of City Cement Company from Saudi Arabia which raised $252m in mid September.

This represented a marginal increase of $33m or 13 percent in amounts raised compared to the same period last year where two IPOs in Saudi Arabia raised $219m.

PwC said despite the relatively quiet third quarter performance, the 2012 year to date results were significantly ahead by $857m or 148 percent compared to 2011.

Steven Drake, head of PwC Capital Markets in the Middle East region said: "Given the macro-dynamics of the GCC region, the summer and Ramadan months are generally slow in terms of IPO activity.

"We are seeing growing issuer interest in equity markets particularly in Saudi Arabia stimulated by improving oil prices, strong corporate earnings and continued infrastructure needs.

"We don't expect to see significant activity in Q4 2012 although prospects for 2013 now look better than they had been."

Unlike equities, the GCC bond market remained undeterred through the summer periods with a strong third quarter performance on both sovereign and corporate fronts, PwC added.

National Bank of Abu Dhabi issued a $750m bond during the month of August which underpinned the strength of the debt market in the region.

PwC said the sukuk market also continued to trend upwards during the quarter augmented by growing investor appetite for Islamic debt financing as the region continues to spend heavily on infrastructure development.

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