Robust Gulf IPO activity records $1.2bln proceeds in Q1

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IPO activity in the Mena region retained strong momentum in the first quarter of 2024 with 10 initial public offerings in Saudi Arabia and the UAE recording combined proceeds of $1.2 billion.

The UAE’s Parkin Company raised the highest proceeds in the region for the quarter at $429 million while Saudi Arabia dominated listing activity with nine IPOs in the quarter, according to the EY Mena IPO Eye Q1 2024 report.

Parkin’s IPO contributed 37.2 per cent of the total IPO value. The IPO was oversubscribed 165 times, with the highest first-day gain among the quarter’s listings at 35 per cent.

This is the third Roads and Transport Authority (RTA) asset to have listed after Salik and the Dubai Taxi Company (DTC).

Following the IPO of Spinneys in the second quarter, the UAE also has significant upcoming listings in 2024, including LuLu Group and Etihad Airways.

Gregory Hughes, EY Mena IPO leader, said the start of the year has been strong with no sign of a slowdown in IPO activity. “The successful listing of Parkin Company on the DFM demonstrated a continued commitment toward the Dubai government’s privatization program that involves listing state-owned companies as part of the nation’s economic diversification drive.”

A Markaz’s report stated that the Q1 IPO proceeds in the UAE marked a decline of 87 per cent compared to the same period of last year. Other GCC countries did not have any IPOs during the period.

Globally, Q1 2024 witnessed a total of 287 IPOs, raising $23.7 billion, a 7.0 per cent increase in value year on year (YoY), as market participants navigated uncertainties stemming from recent economic fluctuations and a global election year.

An additional 25 private companies and 10 funds across various sectors intend to list on Mena exchanges in 2024. Saudi Arabia leads with 21 announced IPOs, followed by the UAE with one. Outside of GCC, Raya Information Technology in Egypt and Crédit Populaire d'Algérie in Algeria have announced their IPOs.

“The first quarter of 2024 started off on a positive note with 10 IPOs concentrated in the GCC region, raising a total of $1.2 billion. Saudi Arabia continued to dominate the listing activity with nine IPOs across diverse sectors, while DFM welcomed its first listing in 2024. The region has retained a robust pipeline, with several companies in GCC and North Africa having announced their intentions to list,” said Brad Watson, EY Mena strategy and transactions leader.

In terms of Mena stock exchange performance, the Egyptian Exchange (EGX30) emerged at the top with an 8.0 per cent gain during Q1 2024, followed by Boursa Kuwait Premier Market with 7.5 per cent and Dubai Financial Market (DFM) with 4.6 per cent.

At the end of the quarter, eight out of the 10 Mena IPOs had a positive return compared to their IPO price, with MBC Group achieving the highest gain of 128 per cent.

Saudi Arabia was again the frontrunner in listing activity in Q1 2024. The country’s largest and the region’s second largest IPO was raised by Modern Mills Company at $724 million accounting for 27.3 per cent of the overall proceeds. This was followed by MBC Group with $222 million and Middle East Pharmaceutical Industries Company with $131 million. All three IPOs were listed on the Tadawul Main Market. The remaining six listings took place on the Nomu – Parallel Market with total proceeds of $57 million. The funds have been sourced from a variety of sectors, such as health care, F&B and media and entertainment.

Saudi Arabia also continued to lead the pipeline activity for the region with several companies, such as Saudi Manpower Solutions Company, Miahona and Panda Retail Company, announcing their plans to list.

The UAE has issued mandatory environmental, social, and governance (ESG) reporting guidelines for listed companies on Abu Dhabi Securities Exchange (ADX). The move marks a significant step toward enhancing transparency and promoting sustainable practices in the region's financial markets.