01 May 2012
Muscat: Initial Public Offering (IPO) activity began to show early signs of recovery towards the end of the first quarter of 2012 in the six nation Gulf Cooperation Council (GCC) stock markets. Investor confidence began to return to markets with share price levels generally improving across the markets, according to PwC.
Regional stock exchanges ended the first quarter strongly, spurred by positive reported 2011 results, higher trading volumes and improved market sentiment. In all, there were two IPOs in the first quarter of 2012 raising a total of $78 million and both hosted on Saudi Arabia's Tadawul, the largest stock exchange by market capitalisation in the GCC region. Takween Advanced Industries, an industrial investment company, was the first listing of 2012 raising a total amount of $62 million in January this year followed by Tokio Marine Saudi Arabia, which closed in March this year raising $16 million.
Although IPO activity improved in the first quarter of 2012 compared to the same period of last year, which witnessed only one offering of $18 million, both IPO volumes and offering values fell behind by 33 per cent and 63 per cent respectively, compared to the fourth quarter of 2011, where three IPOs raised $212 million. The first quarter of this year also saw NMC Health, a health-provider in the UAE, become the first Abu Dhabi based company to list on the premium listing segment of the London Stock Exchange raising $187 million. Steven Drake, Head of PwC Capital Markets in the Middle East region, said; "Despite evidence of improved activity on some regional markets, overall IPO volumes in the region are well below their potential.
Saudi Arabia continues to lead the regional exchanges both in terms of volumes and amounts raised. We expect the trend to continue during 2012 with a number of significant offerings in the pipeline awaiting the right IPO window."
European scenario
On the European front, after a sustained period of market uncertainty and volatility, the IPO market is also showing some signs of recovery after a number of high-profile deals completed in the first quarter of 2012. A total of 58 IPOs raised $3 billion on the European stock markets during the quarter compared to $1.2 billion raised through 78 offerings in the fourth quarter of 2011 and 95 offerings in the first quarter of 2011 which raised a total of $4 billion.
Average IPO offering value rose to $66 million in the quarter compared to $22.6 million in the fourth quarter of 2011 and $52 million in the first quarter of 2011.
Although activity remains muted compared to historical levels, the prospects for future initial public offerings have been boosted by encouraging trading levels of a number of recent issuers, and renewed market stability.
Debt issues
The GCC debt markets expanded further in the first quarter of 2012 following recovery levels seen in the fourth quarter of 2011, as issuers sought to take advantage of better funding costs and liquidity in the market. In the first quarter of this year, the UAE dominated corporate bond issuances in the GCC with Dolphin Energy issuing a $1.3 billion bond and Emirates NBD raising $1 billion. Both issuances received overwhelming investor appetite as demand grew in line with improving market sentiment. Qatar was the other prominent market for corporate bond issuances in the first quarter of 2012 with Qatar National Bank and Doha Bank issuing bonds worth $1 billion and $500 million, respectively.
The sukuk market in the GCC continued to flourish with Saudi Arabia leading GCC sukuk issuances for the first time and overtaking the UAE in the first quarter of 2012.
Muscat: Initial Public Offering (IPO) activity began to show early signs of recovery towards the end of the first quarter of 2012 in the six nation Gulf Cooperation Council (GCC) stock markets. Investor confidence began to return to markets with share price levels generally improving across the markets, according to PwC.
Regional stock exchanges ended the first quarter strongly, spurred by positive reported 2011 results, higher trading volumes and improved market sentiment. In all, there were two IPOs in the first quarter of 2012 raising a total of $78 million and both hosted on Saudi Arabia's Tadawul, the largest stock exchange by market capitalisation in the GCC region. Takween Advanced Industries, an industrial investment company, was the first listing of 2012 raising a total amount of $62 million in January this year followed by Tokio Marine Saudi Arabia, which closed in March this year raising $16 million.
Although IPO activity improved in the first quarter of 2012 compared to the same period of last year, which witnessed only one offering of $18 million, both IPO volumes and offering values fell behind by 33 per cent and 63 per cent respectively, compared to the fourth quarter of 2011, where three IPOs raised $212 million. The first quarter of this year also saw NMC Health, a health-provider in the UAE, become the first Abu Dhabi based company to list on the premium listing segment of the London Stock Exchange raising $187 million. Steven Drake, Head of PwC Capital Markets in the Middle East region, said; "Despite evidence of improved activity on some regional markets, overall IPO volumes in the region are well below their potential.
Saudi Arabia continues to lead the regional exchanges both in terms of volumes and amounts raised. We expect the trend to continue during 2012 with a number of significant offerings in the pipeline awaiting the right IPO window."
European scenario
On the European front, after a sustained period of market uncertainty and volatility, the IPO market is also showing some signs of recovery after a number of high-profile deals completed in the first quarter of 2012. A total of 58 IPOs raised $3 billion on the European stock markets during the quarter compared to $1.2 billion raised through 78 offerings in the fourth quarter of 2011 and 95 offerings in the first quarter of 2011 which raised a total of $4 billion.
Average IPO offering value rose to $66 million in the quarter compared to $22.6 million in the fourth quarter of 2011 and $52 million in the first quarter of 2011.
Although activity remains muted compared to historical levels, the prospects for future initial public offerings have been boosted by encouraging trading levels of a number of recent issuers, and renewed market stability.
Debt issues
The GCC debt markets expanded further in the first quarter of 2012 following recovery levels seen in the fourth quarter of 2011, as issuers sought to take advantage of better funding costs and liquidity in the market. In the first quarter of this year, the UAE dominated corporate bond issuances in the GCC with Dolphin Energy issuing a $1.3 billion bond and Emirates NBD raising $1 billion. Both issuances received overwhelming investor appetite as demand grew in line with improving market sentiment. Qatar was the other prominent market for corporate bond issuances in the first quarter of 2012 with Qatar National Bank and Doha Bank issuing bonds worth $1 billion and $500 million, respectively.
The sukuk market in the GCC continued to flourish with Saudi Arabia leading GCC sukuk issuances for the first time and overtaking the UAE in the first quarter of 2012.
© Times of Oman 2012
