By Gavin Gibbon
Sluggish Q3 has created a backlog of IPOs ready to be launched in region
Initial Public Offering (IPO) activity in the MENA region is expected to pick up in Q4 2019 and into 2020 amid hopes of clarity surrounding geopolitical developments, including US-China trade relations, Hong Kong and Brexit.
According to the latest EY MENA IPO Eye report, a quieter third quarter has created a backlog of IPOs ready to launch.
It revealed that IPO value in the MENA region dropped by 45.3 percent to $190 million in Q3, down from $347.3m in Q3 2018. Just two deals were recorded in Saudi Arabia and Egypt in Q3 2019, a decrease of 50 percent from the four deals listed in the corresponding period last year.
Gregory Hughes, MENA IPO leader, EY, said: “IPO listings in the MENA region may have slowed down during the third quarter of this year versus the prior year, but there remains a strong pipeline of companies finalising the details of their listing for a launch in the next twelve months both regionally and internationally.”
Riyadh has been encouraging more family-owned companies to list on the domestic stock market. In July 2019, Ataa Educational Company, one of Saudi Arabia’s biggest private school operators, raised $93m with its listing – the fourth listing in Riyadh this year.
Global IPO exchange activity was relatively slow compared to Q3 2018 with the total number of deals down by 24 percent and proceeds down by 22 percent, according to the report.
Globally, Q3 2019 witnessed 256 IPOs raising $40.2bn. Technology, healthcare, and industrials remained in the top three sectors by the number of IPOs issued.