The Middle East and North Africa (Mena) is set to see another 23 initial public offers (IPOs), including 16 from private companies, this year, according to Ernst and Young (EY).
The IPO activity in the Mena region remained resilient with 14 maiden offers raising $2.64bn during the second quarter (Q2) of this year, EY said, adding the number of IPOs increased from the 13 in Q2-2023, with a corresponding increase in proceeds of 45.3% against the comparative quarter.
"The remainder of 2024 is set to see robust activity in the IPO market, with an additional 16 private companies and seven funds across various sectors intending to list on the Mena exchanges," the global consultant said.
Of the companies intending to list this year, as many as 14 are in Saudi Arabia, including Riyad Capital, United International Holding and Arabian Mills for Food Products. One company in the UAE has also obtained approval to list, alongside Go Bus in Egypt.
"There is a continued focus on economic diversification away from oil and gas, with the Mena region continuing to see listings from a variety of sectors including health care, education, consumer goods and professional services. As we enter a phase of declining interest rates and continue to witness major country elections around the world, we will monitor with interest the subsequent impact on regional markets and IPO activity,” said Gregory Hughes, EY Mena IPO Leader.
During Q2-2024 Dr Soliman Abdul Kader Fakeeh Hospital was listed on the Tadawul main market, raising the highest proceeds of the quarter – $764mn – and contributing 29% of the overall IPO proceeds. This was followed by Alef Education Consultancy with its listing on the Abu Dhabi Securities Exchange (ADX), which contributed 19.5% of proceeds with the $515mn raised.
"Increased liquidity driven by higher oil prices, economic recovery, and positive market sentiment has kept the IPO activity in the region buoyant with a strong pipeline for the second half of 2024,” according to Brad Watson, EY Mena Strategy and Transactions Leader.
As many as eight out of the 14 Mena IPOs listed in Q2-2024 had shown a positive return (as of June 30, 2024) in terms of their share price in comparison with the IPO price, with Miahona Company achieving the highest gain of 90.4% within the period.
Stock exchanges across the Mena region exhibited varied performances. MSCI Emerging Markets Index ended Q2-2024 with a gain of 4.2%, making it the top-performing market in the GCC or Gulf Co-operation Council, followed by 1% gain in Qatar Stock Exchange (QE) general index.
Globally, IPO activity declined in Q2-2024 on an annualised basis as the number of IPOs dropped 15% from 317 to 271, and proceeds by 31% to $27.8bn from $40.4bn.
The EMEIA region, however, made a remarkable comeback, with inflation approaching ‘normal’ levels, interest rates falling, stock markets rallying to hit all-time highs, and volatility remaining low. This comeback saw the region regain the top global IPO market share by number – 45% of deal volume and 46% of value - for the first time in 16 years.
Gregory Hughes, EY Mena IPO Leader.
