The Middle East and North Africa (MENA) region defied global trends to record a significant increase in the number of companies listing in local equity markets during the first six months of the year, an EY report showed.
“The second quarter of 2022 continued the momentum of the first quarter, with Saudi Arabia and the UAE leading IPO activity in the MENA region. Despite concern from investors regarding the risk of a global recession, there remains a healthy pipeline of IPO candidates from KSA and the UAE, as well as quieter IPO markets such as Oman, Qatar and Kuwait, looking to come to market in the future,” said Gregory Hughes, EY MENA IPO and Transaction Diligence Leader.
The region saw a six-fold year-on-year increase in the number of companies listing during H1 2022, with 24 IPOs raising proceeds of $13.5 billion.
During the second quarter of 2022, MENA IPO markets saw nine IPOs raise approximately $9 billion in proceeds. Although the number of IPOs decreased by 40% when compared with Q1 2022, the proceeds raised more than doubled.
This compares with the global trend where there was a drop of 46% in the number of IPOs and 58% in the proceeds raised when compared to H1 2021.
"Heightened volatility caused by geopolitical tensions and macroeconomic factors, declining valuation and poor post-IPO share price performance led to the postponement of many global IPOs during the first half of 2022," said EY.
UAE's Dubai Electricity and Water Authority (DEWA) raised over $6 billion, becoming the biggest IPO in Europe, Middle East and Africa (EMEA) since 2019 and the largest IPO to date in the country. Borouge, the second-largest IPO during H1 2022, raised $2 billion.
ADC Acquisition Corp PJSC became the first special purpose acquisition company (SPAC) to ever be listed in the MENA region, raising $99.9 million with its listing on the Abu Dhabi Securities Exchange (ADX).
Saudi Arabia leads in IPO volume with five IPOs. Saudi Home Loans Company was listed on the Tadawul during Q2 2022 and raised $160 million. Retal Urban Development Company raised $384 million.
The Nomu-Parallel Market witnessed three IPOs during Q2 2022 which raised US$40.8 million in total. The proceeds came from the listings of the Arabian Food & Dairy Factories Company, Ladun Investment Company and Amwj International Company.
There were also six direct listings reported in Q2 2022, with a total of 12 announced during H1. Three direct listings took place on the Nomu-Parallel Market--Naseej for Communication and Information Technology Company, Aqaseem Factory for Chemicals and Plastics Company and National Environmental Recycling Company.
In Kuwait, Ali Alghanim and Sons Automotive Company raised new capital of $323 million through a private placement before listing on Boursa Kuwait.
(Writing by Brinda Darasha; editing by Cleofe Maceda)