Activities in the Middle East and North Africa's (MENA) equity market moved at a snail's pace at the start of Q2, with oil-rich GCC relatively dormant. However, Tunisia offered some reprieve as it enjoyed a significant influx of IPOs and rights issue in April.
The North African nation enjoyed a rosy investor period as two flotations made their debut during the month - clothing company New Body Line closed its subscription on April 22 after raising USD 8 million, while One Tech Holding closed on April 29 with a USD 49 million capital. The month ended with the IPO of Syphax Airlines, which started on April 30, and remains open through the month of May, planning to raise USD 15.5 million.
In addition to IPOs, the Tunis stock exchange witnessed rights issues of three listed companies. Carthage Cement raised USD 50 million during the early part of the month, while Electrostar and El Wifack Leasing began their issue in the second half of April continuing into May, as they aim to raise USD 6.5 million and USD 8 million, respectively.
Despite this sluggish start to the quarter, the market continues to hold promise. Several companies have announced their plans to launch public offerings either this year or in 2014. Market regulators are also actively working on policies that will encourage further participation in the coming months.
Market liberalization has been the hot topic at the moment, especially in Saudi Arabia, where foreign stock ownership is under debate. Industry observers speculate that a change in policy would pave the way for a rush of much needed capital in the kingdom.
IPOs to look out for
The Saudi stock exchange is set to witness the IPOs of two insurance companies before the end of the second quarter - Aljazira Takaful and AIG-ANB Cooperative Insurance Company. Meanwhile, Nas Holding is expected to launch its IPO later this year.
Aside from Nasdaq's ongoing efforts to establish the right platform that will encourage SMEs to join the IPO journey, construction and real estate are among the first sectors to headline UAE offerings this year. DAMAC Properties is reportedly in talks with investors regarding the listing of its shares, while Arabtec Holding is planning to inject additional shares in the market through a rights issue that will raise more than half a million US dollars.
In Qatar, news of a mega-IPO has kept the market excited. Doha Global Investment Company will be a newly established company planning to raise part of its capital through a public offering and the other part will be contributed by Qatar Holding. Capital raised from this IPO, amounting to USD 3 billion, will be the biggest the region has seen in a long time.
Barwa Bank is planning an IPO as well, which will be followed by a rights issue. The bank aims to be in a strong financial position to take advantage of the increasing number of projects in Qatar. The Commercial Bank of Qatar is also looking to increase its capital to finance one of its deals, and is planning a rights issue to back its bond sale.
Kuwait Finance House rights issue will considerably increase Q2's value of equity raised by selling additional shares to its shareholders, amounting to USD 1 billion.
Two units of Zain (MTC Vodafone Bahrain and Atheer Telecommunications Iraq Limited) have obtained approval to proceed with their IPOs, with one to take place by next year while Iraq's unit to be listed by end of 2013.
Nadine Sharrouf is an IPO Analyst at Zawya.
© Zawya 2013
