Saudi Arabia dominates $881m MENA IPO market during Q2

More than $880m was raised in the Middle East and North Africa through nine IPOs during the second quarter of 2018
Saudi Arabia dominates $881m MENA IPO market during Q2
By Sam Bridge
Tue 28 Aug 2018 02:05 PM

More than $880 million was raised in the Middle East and North Africa through nine IPOs during the second quarter of 2018, up by 42.8 percent compared to the same period last year.

The latest EY MENA IPO Eye report showed that both IPO value and activity increased year-on-year. Out of the nine deals in MENA, seven IPOs were recorded in the GCC, including three REIT listings, raising $780.3 million.

Saudi Arabia led the MENA IPO activity recording four out of nine IPOs in Q2, part of an increasing trend of REITs being listed on the exchange and a reflection of the underlining investor interest in real estate assets in the country, the report said.

It added that the highest value IPO in the quarter was the Mefic REIT Fund IPO, listed on the Saudi Stock Exchange, which raised $237.5 million.

Phil Gandier, MENA transactions leader, EY, said: “The future inclusion of Saudi Arabia in the MSCI emerging markets index has drawn positive attention to the country, attracting investors from across the world.

"The country’s Capital Market Authority has brought in a mandatory corporate governance code, considerably relaxed rules for foreign investors, and raised settlement rules for the domestic Tadawul stock market toward global standards, which have all led to a favorable transacting environment.”

Oman was the only other GCC country with IPO activity in Q2 - the Muscat Securities Market (MSM) recorded a single IPO, raising $12.8 million.

Looking to the future, the MSM has an IPO pipeline of over 10 companies that are expected to complete their listings in the next two to three years.

In the wider MENA region, Egypt and Morocco recorded one deal each, the report said, adding that the real estate sector raised the highest capital, with four REITs raising $553 million.

Gregory Hughes, MENA IPO leader, EY said: “Although oil prices have increased, MENA countries are still feeling the impact of the significant drop in oil prices in recent years. IPO activity was relatively slow in H1 2018, but activity is expected to pick up in H2 2018 and beyond owing to the strong upcoming IPO pipeline.”

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