PHOTO
- Across MENA, positive opportunities ahead for IPO activity, although investors may tread cautiously
Dubai, UAE : In the first quarter of 2019, Saudi Arabia led the MENA IPO market raising a cumulative value of US$ 58.3m in capital, contributed by the listing of Saudi software & services company, Al Moammar Information Systems Company (Saudi SE) on Tadawul, according to the latest EY MENA IPO Eye report.
In Q1, Saudi Arabia’s Tadawul witnessed the start of the initial phase of inclusion on two major international indices in March 2019: the FTSE Russell and S&P Dow Jones’ Emerging Markets indices.
Furthermore, the structural changes to Nomu announced by the Tadawul to support the number of SME listed companies will be executed in two phases in 2019. The first phase includes provisions to allow direct listings on Nomu without an IPO. The second phase will focus on the listing of close-ended funds (CEFs) and real estate investment trusts (REITs) on Nomu.
Phil Gandier, MENA Transactions Leader, EY, says:
“All of these developments underline the fact that KSA has been implementing a number of regulatory enhancements in its equity markets that are effectively improving market access for investors. The Kingdom’s inclusion in these indices is likely to further accelerate buying activity from foreigners in the country. These developments are aligned with the objectives of the financial sector development program envisaged by Saudi Vision 2030 and will support IPO activity in the wider region.”
MENA IPO performance in Q1 2019
While market fluctuations in the MENA region and volatility in global equity markets have caused investors to be cautious, the pipeline for IPO activity in region is strong along with positive opportunities ahead.
Priority for privatization agenda in Egypt
Egypt has its sights set on raising around US$448m from the government IPO program in FY2019–20. The Egyptian exchange (EGX) plans to set up a settlement firm for the futures and derivatives market. The proposed market will make a range of financial instruments available to investors.
The oversubscribed follow-on offering by Eastern Tobacco in February 2019 marked the start of the privatization agenda in Egypt. The private placement part of Eastern Tobacco’s secondary offering of a 4.5% stake was oversubscribed by 1.8 times. Egypt is planning to enable the listing of four to five companies in the second phase of its share sale program that is due to take place by Q4 2019.
More listings on the horizon in Oman in the next two years
Approximately six power generation and water desalination companies are scheduled to be part of the Muscat Securities Market (MSM) IPO market in the next two years.
Gregory Hughes, MENA IPO Leader, EY says:
“There is interest from several companies across the MENA region to execute IPOs, especially for those looking to access international investors and stock markets, however market volatility has dampened IPO activity in the first quarter of this year, and its typically a quieter quarter for IPO activity. Economic reforms and market development initiatives are high on the agenda of regional governments, particularly in Saudi, Egypt and the UAE, which will pave the way for a buoyant MENA IPO market in the upcoming quarters.”
-Ends-
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com.
The MENA practice of EY has been operating in the region since 1923. For over 90 years, we have grown to over 7,500 people united across 21 offices and 16 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
© 2019 Ernst & Young. All Rights Reserved.
ey.com/mena
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
