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Gulf Cooperation Council’s (GCC) capital markets activity will pick up in Q4 2019, following a subdued Q3 2019, according to a PwC study. However, the debt market was active during the third quarter.
Steve Drake, PwC Middle East Capital Markets Partner, said: “We anticipate the coming quarter to be significantly more active with the recent announcement of Saudi Aramco's record-breaking flotation on Tadwaul, along with many other companies, which have expressed their intention to list in 2019.”
“Meanwhile Tadawul’s recent announcement that it will soon allow listing of foreign companies on its exchange offers further optimism and will further promote equity activity in the region,” Drake added.
PwC’s GCC Capital Markets Watch – Q3 2019 study revealed that only one company listed on Saudi Arabia’s Tadawul during the quarter, compared to three companies in Q3 2018.
The sole IPO was from Ataa Educational Company in the consumer services sector and the generated proceeds were $93 million, compared to $484 million raised in Q3 2018.
Drake said that despite a quiet Q3, “it's been an eventful quarter for the UAE debt market, and a notable quarter for the GCC with high value sovereign bond and sukuk issuances. This will continue to revitalise the GCC market activity in the near future.”
The study announced that even though all IPO activities in the region have been limited to Saudi Arabia in 2019, it expects the UAE market to pick up pace after multiple companies have announced their intent to go public and initiated the groundwork for a successful IPO.
PwC said that DP World’s listed sukuk worth $1.5 billion and bonds worth $800 million on Nasdaq, Dubai, helped the emirate to become one of the largest global centres for sukuk listings by value.
The study added that Abu Dhabi’s positive credit rating and competitive return attracted significant interest from investors’ as the first sovereign bond in two years issued by the emirate raised $10 billion. Also Saudi Arabia issued its first Euro denominated bond worth 3 billion euros.
(Reporting by Gerard Aoun, editing by Mily Chakrabarty)
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