The MENA region recorded an increase in IPO volume and value during Q1 2020, with four IPOs raising total proceeds of $814.2 million. This represents a 14-fold increase when compared to the $57.6 million raised from one IPO in the same period last year, global consultant EY said in its MENA IPO Eye report.

Global IPO exchange activity also continued to pick up in Q1 2020, with 235 IPOs raising US$28.5b in IPO value during Q1 2020, compared to $15.1b in the same quarter of the previous year.

Matthew Benson, MENA Transaction Advisory Services Leader, EY, said: “The drop in economic growth and disruption across various industries caused by the COVID-19 pandemic, as well as the decline in demand for oil, and reduction in oil prices, have forced potential issuers to rethink timelines and delay their bourse debuts – a prudent move given the current market scenario. Potential issuers nevertheless continue to seek new capital, in some cases driven by the current market environment.”

Saudi Arabia takes lead

Saudi Arabia led IPO activity in the MENA region with two listings in Q1 2020 with net proceeds totaling $748.7 million. Dr. Sulaiman Al-Habib Medical Services Group raised $700.9 million (main market) by issuing 15 percent of its shares, while Sumou Real Estate Co raised $47.8 million (Nomu market) by issuing 30 percent of its shares.

Saudi Aramco’s listing on its exchange has sent the Tadawul (already the Middle East’s largest bourse) to ninth place globally in terms of market capitalization. A major development was the decision by the Kingdom to downsize its 2020 budget due to the economic conditions caused by COVID-19 and falling oil prices.

In Oman, Aman REIF, a REIT listing, floated 50 percent of its shares on the Muscat SE in a deal that raised $52.5 million in January 2020.

In Egypt, Emerald Real Estate Investments raised $13 million in February 2020 by offering 28 percent of its shares and was oversubscribed 134 percent.

The Egyptian capital market was expecting as many as 14 companies to go public in 2020, however the market is experiencing delays in listing plans due to the impact of COVID-19 on both local and global stock markets.

(Writing by Seban Scaria, editing by Daniel Luiz)

(seban.scaria@refinitiv.com)

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