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Sun 21 Aug 2016 02:38 PM

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Regional IPOs slow to a trickle in Q2

EY research shows value of listings in MENA down by 81% against Q1

Regional IPOs slow to a trickle in Q2

The value of initial public offerings (IPO) in the Middle East and North Africa dropped by 80 percent in the second quarter compared to the first three months of the year, according to research from EY.

There were six listings in the second quarter, collectively raising $397 million. The two listings on the Tadawul (Al Yamamah Steel Industries Company and retailer L’azurde), made Saudi Arabia the most valuable market for capital raised, at $274m.

There were two listings in Egypt and one each in Tunisia and Algeria. Other than Saudi Arabia, no other Gulf country saw an IPO.

“Given the recent trends, Saudi Arabia and Egypt are the key MENA markets that are likely to see any IPO activity in MENA,” said Phil Gandier, EY’s MENA transaction advisory services leader.

“Uncertainty in the global capital markets, driven by events such as the vote by the UK to exit the European Union and fluctuating oil prices, may result in future uncertainty in the MENA capital markets and the potential deferral of IPOs in the MENA region.”

Recent development in local capital markets include a recent decision by Saudi Arabia to allow foreigners to invest in IPOs, while the UAE has drafted new IPO regulations.

Both Saudi Arabia and Qatar have announced plans to open exchanges dedicated to SMEs by the beginning of next year.