The Middle East and North Africa raised USD 852.99 million in capital through the IPO market in 2011, which showed a sharp 69% decrease from the previous year's USD 2,750.53 million.
The second and fourth quarters witnessed the most IPOs, six in each quarter; however, the second quarter took the lead in terms of capital, raising USD 374.78 million, less than half of the amount raised in the same quarter of 2010.
Source: Zawya IPO Monitor
The North Africa and Levant IPO markets were low in terms of value. Morocco had four IPO issuances, Tunisia one and Egypt none. Total value: USD 47.89 million, constituting 5.6% of the capital raised. In the Levant, there were two IPOs in Q1 and Q4, one in Syria and another in Jordan, with USD 9.45 million raised, comprising 1.1%, leaving GCC countries to dominate 93% of the IPO market, raising USD 795.64 million in capital. Saudi Arabia alone took a 53.9% share of the IPO market with five issues raising USD 460.49 million, while three in Abu Dhabi raised USD 271.27 million, taking a 31.8% market share, and one from Oman raising USD 63.88 million taking up 7.48% of the capital market share.
Sector Analysis
In terms of number of IPOs, the industrial manufacturing and financial services sectors had the biggest share in 2011, having six and four IPOs respectively. Morocco had three of its four IPOs from the industrial manufacturing sector, Saudi Arabia had two, and Jordan one.
While the UAE had two of its three IPOs come from the financial services sector, another two came from Syria and Saudi Arabia. In terms of capital raised, Eshraq Properties Company's IPO in the real estate sector was the largest in 2011, raising USD 229.09 million.
Post-IPO Performance
2011 witnessed a total of 16 issues in the IPO market, out of which 14 companies have listed their shares on their respective stock exchanges. The exceptions were Syria's Diab Exchange and Saudi Enaya Cooperative Insurance Company.
After their listing, Saudi companies have shown great performance, having an average of 50% increase in their prices as of December 31, 2011, while those that have listed on Abu Dhabi Stock Exchange have suffered declining prices.
Saudi Integrated Telecom Company was the best performing IPO since its listing on June 28, 2011, with an increase of over 65% over the issue price. Tunisia's only IPO of TelNet Holding has also proved a very successful one with a 50% increase. Abu Dhabi's Eshraq Properties was at the top of this year's IPOs, and saw a sharp 104% increase on the first day of its trading; however, its price has decreased by more than 16% by the end of the year.
As many as 39 companies had announced IPO plans for 2011, 15 of them in the UAE. There are no signs or updates yet of whether these companies are going to come to market or when.
Currently the Omani government is working on issuing new laws in order to encourage SMEs to engage in the IPO market. The new laws aim to allow these companies to issue a minimum of 25% of their capital instead of the previous 40% minimum. Several companies in Oman, especially in the power and utilities sector, have intentions to follow in the steps of SMN Power Holding's successful IPO of 2011.
IPO News
Qatar adopts new listing and IPO rules - 02 Jan 2012
Nasdaq Dubai confident of IPOs - 18 Dec 2011
SMEs get go-ahead for floating IPOs - 19 Oct 2011
Three power IPOs expected by 2013 - 12 Oct 2011
UAE's ESCA: Currently Studying 3 IPO Requests - 10 Oct 2011
New IPOs readying for launch on MSM - 06 Sep 2011
The following Zawya analysts contributed to this report: Lara Ghibril Team Leader, Michel El Maalouly M&A Analyst
© Zawya 2012
