Mideast IPOs raise $3.6bn in Q3
Dubai, October 28, 2008
Middle East markets resisted the dramatic global downturn in the IPO market by raising $3.61 billion in the third quarter of the year from 12 initial public offerings (IPOs) as compared to $4.72bn from 13 IPOs in the second quarter.
Though capital raised was down 23 per cent in the region than in the previous quarter, regional markets fared much better compared to global markets.
Funds raised globally were down 66pc and there have been 108 fewer deals, the lowest activity level seen since 2003, following the dotcom collapse, according to the quarterly global IPO update from Ernst & Young, the region's leading professional services firm.
Five IPOs from the Middle East entered the list of top 20 global IPOs by funds raised in the third quarter. The Saudi Arabian Mining Company IPO was the largest in the world by capital raised with $2.467bn.
Other regional IPOs in the top 20 list by capital raised included the UAE's Drake & Scull with $333 million, the UAE's Damas International with $226m and two Saudi companies - Astra Industrial Group with $248m and Methanol Chemicals/ Chemanol with $193m.
"Saudi Arabia was placed second globally in terms of funds raised by any country with $3bn, equalling 23pc of the global IPO market. China and Australia were placed first and third with 25pc ($3.3bn), and 10pc ($1.3bn) respectively. The UAE came in second in the Mena region with $600m, equivalent to 5pc of global capital raised," Ernst & Young Middle East head of mergers and acquisitions Azhar Zafar said.
From the total IPOs, Saudi Arabia hosted three while the UAE hosted two. However, the leader in the number of IPOs in the region was Jordan with six.
"It is interesting to note that the deal threshold to make the global top 20 has fallen significantly since last year when the minimum deal value required to make the group was $1.9bn; this quarter it was $119m," Ernst & Young Middle East transaction advisory services managing partner Phil Gandier said.
"However, the region is dealing with the global downturn much better than anticipated," he said.
