05 January 2009
Funds raised via initial public offerings (IPOs) in the Middle East fell sharply to just $22.4 million in October and November compared to $6 billion a year earlier, a report claimed yesterday.
Professional services firm Ernst and Young said only three IPOs came to market in those two months, compared to ten in the same period in 2007.
The region did, however, raise $13.4 billion through 55 IPOs from January to November, up 4.6 per cent on the $12.8 billion generated for all of 2007.
"Issuers are not willing to accept current market valuations and therefore scheduled IPOs coming to the markets are being delayed," said Phil Gandier, partner at Ernst and Young Middle East.
The UAE accounted for just 10.3 per cent of IPO activity in the region last year, with Saudi Arabia claiming the lion's share of 78 per cent and Egypt third on 4.7 per cent.
Gandier said it was difficult to predict when IPO activity would recover.
"Regional capital markets need to stabilise in order to rebuild confidence and in order for IPO opportunities to re-emerge," he said.
The report came as Palm island developer Nakheel was again said to be mulling an IPO this year to raise as much as $15 billion in extra capital.
The Telegraph newspaper said bankers at JP Morgan Chase have been examining options to raise money for Nakheel, including a dual listing on Nasdaq Dubai and in London. The timing has not yet been decided, it said.
A Nakheel spokeswoman said "an IPO is one of our options; it doesn't mean that an IPO is imminent".
Funds raised via initial public offerings (IPOs) in the Middle East fell sharply to just $22.4 million in October and November compared to $6 billion a year earlier, a report claimed yesterday.
Professional services firm Ernst and Young said only three IPOs came to market in those two months, compared to ten in the same period in 2007.
The region did, however, raise $13.4 billion through 55 IPOs from January to November, up 4.6 per cent on the $12.8 billion generated for all of 2007.
"Issuers are not willing to accept current market valuations and therefore scheduled IPOs coming to the markets are being delayed," said Phil Gandier, partner at Ernst and Young Middle East.
The UAE accounted for just 10.3 per cent of IPO activity in the region last year, with Saudi Arabia claiming the lion's share of 78 per cent and Egypt third on 4.7 per cent.
Gandier said it was difficult to predict when IPO activity would recover.
"Regional capital markets need to stabilise in order to rebuild confidence and in order for IPO opportunities to re-emerge," he said.
The report came as Palm island developer Nakheel was again said to be mulling an IPO this year to raise as much as $15 billion in extra capital.
The Telegraph newspaper said bankers at JP Morgan Chase have been examining options to raise money for Nakheel, including a dual listing on Nasdaq Dubai and in London. The timing has not yet been decided, it said.
A Nakheel spokeswoman said "an IPO is one of our options; it doesn't mean that an IPO is imminent".
© 7Days 2009
