According to an EY report, The Middle East and North Africa (MENA) region recorded a considerable increase in new company listings in local equity markets in the first half of the year, in activity that defied global economic trends.
Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, said that the second quarter of the current year continued with the momentum shown in the first quarter. He added that the UAE and Saudi Arabia led IPO activity in the MENA region. Hughes further stated that despite the risk of a global recession dampening investor sentiment, the UAE and KSA continued to line up candidates for IPOs, in addition to relatively quieter IPO markets like Kuwait, Qatar and Oman.
Compared to H1 2022, the MENA region witnessed a dramatic six-fold increase year-on-year in the number of companies listed, with a total of 24 IPOs raising almost USD13.5 billion.
MENA IPO markets witnessed nine IPOs raising almost USD9 billion in the second quarter of 2022. Compared to Q1 2022, the number of IPOs decreased by 40 percent, although the proceeds raised more than doubled.
Globally, markets saw a drop of 46 percent in the number of IPOs, and 58 percent in the proceeds raised as compared to H1 2021.
In its report, EY stated that increased volatility as a result of geopolitical tensions, macroeconomic factors, reducing valuation and poor performance of shares post-IPO resulted in the postponement of a number of global IPOs during the first half of 2022.
Dubai Electricity and Water Supply Authority (DEWA), based in the UAE, raised over USD6 billion in its IPO, making it the largest IPO in the Europe, Middle East and Africa (EMEA) since 2019, and the largest ever IPO in the UAE. The second largest IPO dduring H1 2022 came from Borouge, and raised USD2 billion.
The first ever Special Purpose Acquisition Company (SPAC) in the region was ADC Acquisition Corp PJSC, and raised USD99.9 million with its listing on the Abu Dhabi Securities Exchange (ADX).
Saudi Arabia leader in IPO volume for MENA
Saudi Arabia emerged as the leader in the region for IPO volume, with a total of five IPOs. Retal Urban Development Company raised USd384 million, and Saudi Home Loans Company raised USD160 million after being listed on the Tadawul during Q2 2022.
Three IPOs raised almost USD40.8 million after listig on the Nomu-Parallel Market in the second quarter of 2022. Ladun Investment Company, Arabian Food and Dairy Factories Company and Amwj International Companies were the companies listed on the market.
A total of 12 listings were announced during the first half of 2022, with six direct listings reported for the second quarter of 2022. The Nomu-Parallel Market saw three direct listings, which included Naseej for Communication and Information Technology Company, Aqaseem Factory for Chemicals and Plastics Company, and National environmental Recycling Company.
Ali Alghanim and Sons Automotive Company in Kuwait raised fresh capital worth USD323 million with a private placement before listing on Boursa Kuwait.