IPO activity in Q1 2024 saw proceeds in the UAE and Saudi Arabia topping $1.2bn, according to the EY MENA IPO Eye Q1 2024 report.
The MENA region saw strong momentum with 10 IPOs in Saudi Arabia and the UAE raising proceeds of $1.2bn.
Globally, Q1 2024 witnessed a total of 287 IPOs, raising $23.7bn, a 7 per cent increase in value year on year as market participants navigated uncertainties stemming from recent economic fluctuations and a global election year.
MENA IPO activity in Q1 2024
An additional 25 private companies and 10 funds across various sectors intend to list on MENA exchanges in 2024.
KSA leads with 21 announced IPOs, followed by the UAE with one.
Outside of the GCC, Raya Information Technology in Egypt and Crédit Populaire d’Algérie in Algeria have announced their planned IPOs.
In terms of MENA stock exchange performance, the Egyptian Exchange (EGX30) emerged at the top with an 8 per cent gain during Q1 2024, followed by Boursa Kuwait Premier Market with 7.5 per cent and Dubai Financial Market (DFM) with 4.6 per cent.
At the end of the quarter, eight out of the 10 MENA IPOs had a positive return compared to their IPO price, with MBC Group achieving the highest gain of 128 per cent.
Brad Watson, EY MENA Strategy and Transactions Leader, said: “The first quarter 2024 started off on a positive note with 10 IPOs concentrated in the GCC region, raising a total of $1.2bn. Saudi Arabia continued to dominate listing activity with nine IPOs across diverse sectors, while DFM welcomed its first listing in 2024.
“The region has retained a robust pipeline, with several companies in the GCC and North Africa having announced their intentions to list.”
KSA was again the frontrunner in listing activity in Q1 2024. The country’s largest, and the region’s second-largest, IPO was raised by Modern Mills Company at $724m, accounting for 27.3 per cent of the overall proceeds.
This was followed by MBC Group with $222m and Middle East Pharmaceutical Industries Company with $131m.
All three IPOs were listed on the Tadawul Main Market. The remaining six listings took place on the Nomu – Parallel Market with total proceeds of US$57m.
The funds have been sourced from a variety of sectors, such as healthcare, F&B, and media and entertainment.
The Kingdom also continued to lead the pipeline activity for the MENA region with several companies, such as Saudi Manpower Solutions Company (SMASCO), Miahona, and Panda Retail Company, announcing their plans to list.
In the UAE, Parkin Company PJSC raised the highest proceeds in the region in Q1 2024 with $400m on DFM, contributing 37.2 per cent of the total IPO value.
The Initial Public Offering was oversubscribed 165 times, with the highest first-day gain among the quarter’s listings at 35 per cent.
This is the third Roads and Transport Authority (RTA) asset to have listed after Salik and the Dubai Taxi Company (DTC).
The country also announced significant upcoming listings, including Spinneys, LuLu Group and Etihad Airways.
The UAE has issued mandatory environmental, social and governance (ESG) reporting guidelines for listed companies on Abu Dhabi Securities Exchange (ADX).
The move marks a significant step toward enhancing transparency and promoting sustainable practices in the region’s financial markets. In addition, Muscat Stock Exchange (MSX) introduced voluntary ESG disclosure guidelines in 2023, with mandatory sustainability reporting expected to be implemented by 2025.
Meanwhile, Saudi Green Initiative, which aims to plant 10bn trees by 2030, among other goals, demonstrates a commitment to environmental protection and a shift towards renewable energy sources.
By embracing ESG reporting, the GCC can unlock sustainable growth, attract responsible investments and contribute to a greener global economy.
Gregory Hughes, EY MENA IPO Leader, said: “The start of the year has been strong with no sign of a slowdown in IPO activity. The successful listing of Parkin Company PJSC on the DFM demonstrated a continued commitment toward the Dubai government’s privatisation program that involves listing state-owned companies as part of the nation’s economic diversification drive.”
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