Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Saudi Arabia Leads MENA IPO Drive

Saudi Arabia Leads MENA IPO Drive

Monday, 11 December, 2017 - 09:30
Investors monitor screens displaying stock information at the Saudi Stock Exchange in Riyadh. (Reuters)

Saudi Arabia continues to lead the way for IPO activity in the region, with an increasing trend of real estate investment trusts (REITs) being listed on the exchange underlining investor interest in real estate assets in the country, announced Ernst and Young MENA Financial Services IPO Leader Mayur Pau.

He added: "Many private equity backed and family groups continue to assess the IPO market and are working on preparing attractive IPO opportunities. In particular, the UAE, Saudi Arabia and Egypt have a strong pipeline of announced and rumored IPOs, with a strong backlog of IPOs potentially preparing to come to market in the last quarter of 2017 and early 2018."

The MENA region has witnessed five IPOs during the third quarter of 2017, worth USD236.7 million, an increase of 20 percent compared to the same period of last year.

“The MENA IPO market outlook is positive against the backdrop of increasing stability in oil prices, improving investor confidence in the global markets and a strong desire to raise funds through privatization, resulting in a large pipeline of companies potentially preparing to come to market,” said Gregory Hughes, Ernst and Young’s MENA IPO leader.

He added: “Based on the pipeline of IPOs, we expect to see a number of premium government or partially government owned assets being floated over the next two years, particularly in the energy-related sector.”

GCC markets have also seen an increase in activity in the region’s relatively new REIT market. After opening its stock market to REIT funds in 2016, Saudi Arabia has seen six REIT listings with two REIT funds in the third quarter of 2017 raising $144.8 million.

Globally, the IPO pipeline surpassed the authorized capital in 2016 with 330 IPOs issued internationally in Q3 of 2017 and total revenues of USD37.6 billion. Global IPOs volume also exceeded during the past nine months of 2017 the total of the same period of 2016 (a rise of 59 percent).

Editor Picks