Monday, Aug 14, 2017

Dubai: After a positive start to the year, IPO performance in the Gulf Cooperation Council (GCC) in the second quarter of 2017 witnessed a slowdown in both the number of offerings and total proceeds raised, PricewaterCoopers (PwC) said on Monday.

In terms of IPO performance the second quarter, the number of offerings slightly increased, with three IPOs in the second quarter, compared to two IPOs in the same period last year.

The total proceeds raised in the second quarter was 38 per cent lower on year, PwC said in a statement.

The Kingdom of Saudi Arabia hosted the only three IPOs of this quarter; they were allocated between Saudi Stock Exchange primary market and the parallel market.

On the primary exchange front, the only offering in the second quarter was by Jadwa REIT Alharamin FUND, which floated a total of 36 million shares, raising proceeds of $96 million (Dh352 million).

On the parallel market front, the first and largest offering was by Thob Al Aseel Co, which floated three million shares, raising proceeds of $68 million.

“During Q2 2017, the Kingdom of Saudi Arabia continued to be the main driver of IPO market activity in the GCC, while the NOMU parallel market for small and medium-sized enterprises in the Kingdom remained popular among investors,” Steve Drake, Head of PwC’s Capital Markets and Accounting Advisory Services team in the Middle East said in a statement.

Bond and Sukuk markets

The appetite for debt issuance in the GCC surged throughout second quarter of 2017. Sovereign issuance by GCC governments remained the main theme, whilst the quarter saw KSA issue its first US dollar denominated sukuk, raising proceeds of US$9 billion. The GCC main economies maintained high credit quality and investment grade status.

Corporate bond issuance remained very active across the region while sovereign bond issuance activity slowed down in Q2 2017. In the UAE, Industrial & Commercial Bank of China Limited - Dubai Branch listed three bonds on Nasdaq Dubai, amounting to $400 million, $300 million and €500 million (Dh2.1 billion). In KSA, ACWA Power Management and Investments, issued bonds amounting to $814 million.

In Kuwait, National Bank of Kuwait (NBK) issued non-guaranteed bonds of $750 million as part of its medium-term bonds issue programme.

Staff Report

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