Saturday, May 05, 2012
DUBAI (Zawya Dow Jones)--Initial public offerings in the Middle East and North Africa region raised a total of $82.8 million in the first quarter of 2012, with activity still depressed by low valuations, according to a report published Saturday by Ernst & Young.
The amount raised in the first quarter was well above the $21.7 million of IPO transactions in the equivalent period of 2011, when the Arab spring revolutions were getting underway, but was a small fraction of the $226.1 million of IPO deals in the final quarter of last year.
"Even though we have seen an improvement in the performance of regional bourses, this has not yet translated into a consistent increase in regional IPO activity," said Phil Gandier, the head of MENA transaction advisory services at Ernst & Young, in an emailed statement.
"The IPO markets have been very quiet since 2009, mainly due to lower than acceptable valuations than private and family businesses were willing to accept," he added.
However, Gandier said the recent improvement in secondary markets has increased the prospects for better pricing of future IPOs. Though IPO numbers have remained flat, Ernst & Young sees growing interest from private and family businesses in embarking on an IPO.
"The strategic rationale of institutionalizing these companies and protecting them from succession issues by embarking on the IPO journey is as relevant as ever," Gandier said.
During the first quarter of 2012, there were two IPOs in Saudi Arabia - by Takween Advanced Industries raising $62.4 million and Tokio Marine Saudi Arabia raising $16 million - and one each in Morocco and Tunisia, Ernst & Young said.
Morocco's Afric Industries SA raised $3.1 million and Tunisia's Hexabyte raised $1.31 million, the report added.
- Dubai bureau, Dow Jones Newswires +97144461697 djnews.dubai@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
05-05-12 0937GMT
