Sunday, Aug 21, 2011
(This story was originally published Thursday.)
DUBAI (Zawya Dow Jones)--The total value and number of initial public offerings in the GCC, or Gulf Cooperation Council, region fell sharply in the first half of the year, as investors continued to fret over the health of the global economy and political unrest in the Middle East curbed activity, a report from consultancy and tax firm PwC showed Thursday.
Four companies were listed in the first half worth a total $358 million, compared with 8 listings totalling $830 million in the same period in 2010, according to data from PwC. Three listings, including Eshraq Properties, took place in the UAE, while Saudi Arabia, traditionally the most active country, saw only one IPO.
The drop in activity "is reflective of the continuing investor caution in light of current global economic uncertainties which has weighed down demand for new issues," said PwC, adding that concerns over the political unrest and several IPO delays "have impacted IPO pricing discussions, contributing to reported tensions in relationships between the sell side community and investors."
PwC's head of capital markets Steve Drake expects IPO activity in Saudi Arabia to pick up in the second half of 2011, while regional companies are expected to continue looking to list on international markets, particularly in certain sectors such as oil and gas.
"We believe that there is pent up demand for IPO capital in the market however realistic pricing and a strong growth story are crucial to draw investor interest and market demand," Drake said.
-By Nicolas Parasie, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
21-08-11 0355GMT
