MidEast IPO market expected to pick up despite Q1 slump

Ernst & Young exec says strong IPO activity is expected in region for the rest of the year
MidEast IPO market expected to pick up despite Q1 slump
By Andy Sambidge
Fri 18 Apr 2014 10:08 AM

IPO activity in the Middle East and North Africa is expected to pick up during the remainder of 2014 despite a double-digit slump during the first quarter, according to Ernst & Young.

Its Q1 2014 MENA IPO update showed that five IPOs from MENA raised $1.283 billion, a decrease of 21 percent compared to Q1 2013.

The MENA IPO market in Q1 2014 saw no change in terms of volume compared to Q1 2013.

But Phil Gandier, MENA head of transaction advisory services, EY, remained upbeat on prospects for the regional IPO market this year

He said: "We expect that Q2 2014 and the second half of 2014 will see strong IPO activity. The ongoing transformation of family groups into institutional entities led by the younger generation that are more competitive and not susceptible to family succession disruptions, will drive IPO activity.

"With sound economic fundamentals and strong regional liquidity fuelling new listings, the MENA pipeline is looking extremely healthy," he said

He added: "The MENA IPO market is off to a slower start in the first quarter compared to the same period last year, however compared to IPO performance over the past few years, Q1 2014 has been one of the best performing quarters. The recently announced Emirates REIT and Marka IPOs will spur further IPO activity and point the way to high levels of activity through the first half of 2014."

During Q1, the region saw two IPOs in Tunisia and one each from Qatar, Saudi Arabia and the UAE. The largest IPO in Q1 2014 was in Qatar, with Mesaieed Petrochemical Holding Company raising $905 million, which was the first IPO on the Qatari stock exchange since 2010.

The oil and gas sector led in Q1 2014 with two IPOs followed by telecommunications, industrial manufacturing and retail sectors with one IPO each.

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