IPOs in the MENA region remain buoyant with a promising pipeline for the rest of the year, as Q1 2023 saw 10 listings with combined proceeds of $3.4 billion, consultancy firm EY said in a new report.
However, the number of listings and value is down 33% and 14% in Q1 2023 year-on-year.
The promising pipeline in the MENA is driven by various enabling initiatives, such as the Abu Dhabi IPO Fund. In addition, six companies in Saudi Arabia have already announced plans to list on the Saudi Exchange (Tadawul).
The volatility experienced in the regional equity market during 2022 continued into the first quarter due to rising interest rates, inflation concerns, unexpected global banking turbulence and geopolitical uncertainties, impacting investor sentiment.
At the end of the quarter, six out of the 10 MENA IPOs had a positive return compared to their IPO price, with Presight Al Holding PLC achieving the highest gain of 146.3%.
“Q1 2023 proved MENA IPOs continue to go against global trends in these uncertain economic times, building on the momentum from last year. 2023 shows a healthy pipeline across the region, with several initiatives to support private and government entities on their path to IPO,” said EY MENA Strategy and Transactions Leader Brad Watson.
Saudi leads the way
Saudi Arabia was the frontrunner in listing activity in Q1 2023, reporting six IPOs on the Nomu-Parallel Market with proceeds of $700 million and one Real Estate Investment Trust (REIT) raising $100 million.
However, Abu Dhabi Securities Exchange (ADX) registered the largest IPO of the quarter globally, with ADNOC Gas raising $2.5 billion. The IPO was oversubscribed 58 times, with its first closing day share price trading 19% higher than its listing price of AED 2.37.
This is the sixth company listed by the ADNOC Group, which continues the trend into 2023 with further announcements, EY said.
In addition, Presight AI Holding, an ADX-listed data analytics company, raised $500 million with the second IPO from G42’s portfolio was oversubscribed 136 times.
Other regional exchanges also saw IPO activity in Q1 2023. The IPO of Abraj Energy Services SAOG, Oman’s largest oilfield services provider, raised $200 million on the Muscat Stock Exchange (MSX) and was oversubscribed 8.7 times.
In addition, the Qatar Stock Exchange (QSE) saw a direct listing by Damaan Islamic Insurance Company.
Despite the continued devaluation of the Egyptian pound, the Egypt Stock Market (EGX30) finished the quarter with a 12.5% gain, reinforcing its status as the Middle East’s best performer.
“Saudi Arabia is still the most active market in terms of volume, while the largest IPOs continue to be dominated by the energy sector. Q2 2023 is already off to a strong start with a number of announced regional listings,” stated EY MENA IPO and Transaction Diligence Leader Gregory Hughes.
(Editing by Brinda Darasha; email@example.com)