Mena IPOs raise $2.4bn in H1, up 14pc
Dubai, July 20, 2014
The Mena IPO market recorded a total of 16 deals raising $2.4 billion in the first six months of the year, up 14 per cent for both volume and proceeds on the same period last year, said a report.
The EY’s Mena IPO Update: Q2 2014, pointed out that 11 IPOs raised $1.1 billion in the second quarter of the year, a 129 per cent increase on the previous quarter and a rise of 22 per cent compared to last year by deal numbers.
IPOs from the GCC represented 90 per cent of all Mena deals in the first half of the year, with 10 of them raising $2.26 billion. Saudi Arabia led the GCC actiivity during the perioud with four IPOs, followed by UAE with three, Oman with two and Qatar with one.
Phil Gandier, Mena Transactions leader, EY, said: “The IPO market is very strong across Mena, particularly among the GCC countries which continue to attract large IPOs and drive the strong performance in the region. In the first half of the year, the majority of IPO deals were in Q2, which is a good indication for a positive second half of the year.
“All the IPOs executed in Q2 were within the regional market which shows a shift from the trend of international listings in the last few quarters. The combination of improved liquidity and reasonable valuations will continue to drive the IPO activity in the region.”
Qatar’s Mesaieed Petrochemical Holding Company launched the region’s largest issue in the first half, raising $903 million in January. Saudi Arabia and Tunisia had the highest number of IPOs with four each across the first half of the year.
The fundamentals of the Saudi economy along with the increased appetite for equities and improved valuation have contributed to a better IPO performance in the kingdom.
Mayur Pau, Mena IPO leader, EY, said: “The regional IPO market has seen some notable developments in terms of new deals. The upgrading of the UAE to emerging markets status in May will go a long way towards changing investors’ perceptions and will help to boost the long-term prospects of the market.”
The activity was spread broadly across sectors with IPOs in the healthcare, power and utilities, retail, construction, oil and gas, telecommunications, leisure and tourism and industrial manufacturing sectors.
The Mena stock markets have continued the upward momentum from 2013 this year, remaining attractive with average price-to-earnings (PE) of 13.9 at the end of June 2014. The stock exchanges of Kuwait, Morocco and Saudi Arabia had the higher PE ratios.
The number of IPO focused funds in Mena could be on the rise with more IPOs set to enter Mena markets in the next two years, which could bring in greater investment and IPO opportunities.
“In the second half of 2014 we expect the Mena IPO market to remain buoyant with the fundamentals in place for a sustained period of strong and steady IPO activity,” said Gandier.
“With a solid pipeline of IPO-ready businesses across a broad range of geographic markets and from multiple sectors, strong investor confidence and expected ‘IPO friendly’ regulatory and legal reforms in key markets, we expect an uptick of IPOs in the second half of the year,” he added. - TradeArabia News Service