Dubai: The initial public offering (IPO) market in the Gulf Cooperation Council (GCC) in the second quarter (Q2) of 2014 witnessed a total of nine IPOs raising $1.855 billion, compared to a total of five IPOs raising $385 million in H1 2013, an 80% increase in volume and 381% increase in value.
The IPO market in H1 closed on a high note, with a total of seven IPOs, compared to two in Q1 2014. The quarter witnessed its first IPO in April with the UAE based company, Emirates REIT (CEIC) Limited, listing on NASDAQ Dubai Limited and raising USD 201 million. Also in April, Marka PJSC, a UAE based company, listed on the Dubai Financial Market (DFM) raising $77 million.
The Saudi Arabian Stock Exchange, Tadawul, witnessed three IPOs in Q2 2014 by Umm Al Qura Cement Company, Abdulmohsen AlHokair Group for Tourism and Development Co and Al Hammadi Company for Development and Investment raising $73 million, $220 million and $168 million, respectively. In Oman, there were two power company listings, Al Suwadi Power Company SAOG and Al Batinah Power Co SAOG, raising $84 million and $78 million, respectively.
The total value of the seven IPOs in Q2 2014 was $902 million, a slight decrease of 5% compared to Q1 2014, although this is a considerable increase compared to the same quarter last year where a total of three IPOs raised $48 million.
IPO performance and activity in H1 2014 and the positive responses from investors is a testament to the recovery of confidence in the market by both issuers and investors. The outlook for IPOs in the GCC appears to be strong particularly looking towards the latter part of 2014 and into 2015.
On the cross border front, the trend seems to continue with regional companies looking to list on international markets. However, Q2 2014 proved to be challenging as we saw several companies postponing their planned IPOs despite the recovery in markets.
“Equity capital markets performance in the region in the H1 2014 improved considerably with a total of nine listings, of which two were on the UAE stock exchanges which shows signs of recovery in that market. However the average offering value is still relatively modest albeit it has improved compared to the previous year. Looking ahead, the remainder of 2014 looks very strong and we would expect to see this continue into 2015,” Steve Drake, Head of PwC’s Capital Markets in the Middle East region, said.