EY report says increase in IPO activity across the MENA region is proof that companies are still keen to execute IPOs and gain access to international investors and stock markets
IPO deal value in the Middle East and North Africa region more than doubled to $2.8 billion in the second quarter of 2019, according to EY.
Six deals were recorded in Q2, including one REIT listing, a decrease of 33.3 percent from the nine deals listed in Q2 2018, it added in a report.
Gregory Hughes, MENA IPO leader, EY, said: “The increase in IPO activity across the MENA region during the second quarter of this year, which included two cross-border listings, is proof that companies are still keen to execute IPOs and gain access to international investors and stock markets.
"The IPO deal value raised in the first half of 2019 has already nearly surpassed the total deal value raised in 2018.”
Saudi Arabia led the IPO activity in the MENA region with three listings on the main market in Q2 with net proceeds of over $1 billion.
Arabian Centres Company Limited, one of the largest IPOs in the country with proceeds of $658.7 million, was the first IPO that allowed the sale of securities to qualified institutional buyers in the United States.
As part of Vision 2030, the Saudi Government has planned privatisation deals worth $533 million to be carried out by the end of 2019. The government also remains committed to the Aramco IPO, which is expected to take place between 2020-2021.
The EY report also said that the UAE witnessed the cross-border listings of two fintech companies - Network International Holdings Limited and Finablr - on the premium segment of the London Stock Exchange, raising net proceeds of $1.8 billion in Q2.
“Across the MENA region, IPO activity is expected to progress cautiously, with an optimistic outlook owing to events and themes such as the MSCI and FTSE inclusions, privatization drives, and government initiatives,” added Gregory.
Global IPO exchange activity continued to pick up in Q2, with 302 IPOs raising $56.8 billion despite the US-China trade tensions and uncertainties related to Brexit.