10 April 2013
JEDDAH - Middle East and North Africa (MENA) capital markets recorded a twentyfold increase in capital raised and a 25 percent decrease in deal volume in Q1 2013 through 3 IPOs, raising approximately $1.6 billion in proceeds, compared to Q1 2012 with 4 IPOs, raising $82.8 million in proceeds, Ernst & Young said in its 2013 Q1 MENA IPO update.
The three regional IPOs in Q1 2013 represented a 374.3 percent increase from the $339.8 million raised in the previous quarter (Q4 2012).
Phil Gandier, MENA Head of Transaction Advisory Services, Ernst & Young, said: "Q1' 2013 posted the strongest results for the first quarter of the year since 2008. However, the majority of the value is attributed to a large ticket telecommunications IPO in Iraq. This sector is traditionally associated with large value transactions and the high Q1 performance will be sustainable if we start to see similar large value transactions on a regular basis which would bolster the regions capital markets."
Out of the three regional IPOs in the first quarter of 2013, two came to market in Saudi Arabia while one was reported in Iraq. The largest issuance was in Iraq, with Asiacell Communications raising $1.3 billion, followed by Northern Region Cement Company that raised $240 million and National Medical Care Company that raised $97.2 million, both of Saudi Arabia.
"Over 40 percent of investors in the Middle East and Africa stated a preference to invest overseas, as evidenced in Ernst & Young's recent institutional investor study. Therefore, the challenge remains whereby more domestic deal activity would be a key driver for stronger IPO activity and growth in the MENA region," Phil added.
According to Ernst and Young's MENA Q4 and year-end 2012 IPO Update, regional capital markets raised approximately $2 billion in 2012 up from $843.9 million in 2011; an increase of 134 percent. The year closes with regional companies raising a total of $339.8 million through three initial public offerings (IPOs) in the fourth quarter of 2012.
This is significantly higher than the $226.1 million raised in the fourth quarter of 2011 and the $252.3 million raised in the third quarter of this year.
Dallah Healthcare Holding Company led regional IPO deal sizes with its $143 million listing on the Saudi Stock Exchange (Tadawul) in November followed by Al Izz Islamic Bank at $106 million on the Muscat Securities Market in September. The third IPO in Q4 was Amira Nature foods listing on the New York Stock Exchange (NYSE) at $90 million in October.
Saudi Arabia led the country standings in 2012, raising $1.4 billion through seven IPOs in all of 2012, followed by the UAE with $277 million and Oman with $264.4 million. Morocco and Tunisia were the only other MENA countries with IPO activity in 2012.
JEDDAH - Middle East and North Africa (MENA) capital markets recorded a twentyfold increase in capital raised and a 25 percent decrease in deal volume in Q1 2013 through 3 IPOs, raising approximately $1.6 billion in proceeds, compared to Q1 2012 with 4 IPOs, raising $82.8 million in proceeds, Ernst & Young said in its 2013 Q1 MENA IPO update.
The three regional IPOs in Q1 2013 represented a 374.3 percent increase from the $339.8 million raised in the previous quarter (Q4 2012).
Phil Gandier, MENA Head of Transaction Advisory Services, Ernst & Young, said: "Q1' 2013 posted the strongest results for the first quarter of the year since 2008. However, the majority of the value is attributed to a large ticket telecommunications IPO in Iraq. This sector is traditionally associated with large value transactions and the high Q1 performance will be sustainable if we start to see similar large value transactions on a regular basis which would bolster the regions capital markets."
Out of the three regional IPOs in the first quarter of 2013, two came to market in Saudi Arabia while one was reported in Iraq. The largest issuance was in Iraq, with Asiacell Communications raising $1.3 billion, followed by Northern Region Cement Company that raised $240 million and National Medical Care Company that raised $97.2 million, both of Saudi Arabia.
"Over 40 percent of investors in the Middle East and Africa stated a preference to invest overseas, as evidenced in Ernst & Young's recent institutional investor study. Therefore, the challenge remains whereby more domestic deal activity would be a key driver for stronger IPO activity and growth in the MENA region," Phil added.
According to Ernst and Young's MENA Q4 and year-end 2012 IPO Update, regional capital markets raised approximately $2 billion in 2012 up from $843.9 million in 2011; an increase of 134 percent. The year closes with regional companies raising a total of $339.8 million through three initial public offerings (IPOs) in the fourth quarter of 2012.
This is significantly higher than the $226.1 million raised in the fourth quarter of 2011 and the $252.3 million raised in the third quarter of this year.
Dallah Healthcare Holding Company led regional IPO deal sizes with its $143 million listing on the Saudi Stock Exchange (Tadawul) in November followed by Al Izz Islamic Bank at $106 million on the Muscat Securities Market in September. The third IPO in Q4 was Amira Nature foods listing on the New York Stock Exchange (NYSE) at $90 million in October.
Saudi Arabia led the country standings in 2012, raising $1.4 billion through seven IPOs in all of 2012, followed by the UAE with $277 million and Oman with $264.4 million. Morocco and Tunisia were the only other MENA countries with IPO activity in 2012.
© The Saudi Gazette 2013
