The Middle East and North African IPO market is positioned for strong growth in the second half of 2024, with 16 private companies and seven funds planning to list on the region’s exchanges. This surge in IPO activity follows a solid first half, driven primarily by the UAE and Saudi Arabia.
The upcoming IPOs are expected to be fueled by the region’s ongoing privatization efforts, increased liquidity, economic recovery, and positive market sentiment, according to market experts.
First Half Success
In the first half of 2024, the MENA region saw a 45.3% increase in IPOs, which collectively raised an impressive $2.64 billion. An Ernst & Young report highlighted that among the 16 companies planning to go public in the near future, 14 are based in Saudi Arabia.
Some notable companies include Riyad Capital, United International Holding Co., and Arabian Mills for Food Products. Additionally, one company in the UAE and Go Bus in Egypt have also received approval for listing, as per the E&Y report.
Diverse Sector Listings
Several sectors are contributing to the IPO boom in the MENA region. These include healthcare, education, consumer goods, and professional services. This diversification aligns with the region’s focus on moving away from traditional industries like oil and gas.
Gregory Hughes, EY Mena IPO leader, noted, “As we navigate through changing interest rates and global political landscapes, monitoring the impact on regional markets and IPO activity will be crucial.”
Key Market Leaders
The IPO market in MENA continues to be led by Saudi Arabia and the UAE, with Kuwait also making significant strides. The second quarter of 2024 witnessed notable listings such as Dr. Soliman Abdul Kader Fakeeh Hospital Co in Saudi Arabia, Alef Education Consultancy on the Abu Dhabi Securities Exchange, and Spinneys 1961 Holding Plc on the Dubai Financial Market.
Performance and Returns
The IPOs in Q2 2024 showcased mixed results, with eight out of 14 companies reporting positive returns compared to their IPO prices. Miahona Company led the gains with a remarkable 90.4% increase in share price by June 30, 2024.
Stock exchanges in the region displayed varying performances, with the MSCI Emerging Markets Index and the Qatar Exchange general index showing promising results.
Global Insights
Globally, IPO activity experienced a decline in Q2 2024 compared to the previous year. Despite this, companies from the GCC region raised a substantial $10.79 billion through IPOs in 2023. Fitch Ratings predicts that the sale of minority stakes by government entities and the establishment of public subscription funds will further boost IPO numbers in the region this year.
Future Prospects
With increased liquidity, positive market sentiment, and a recovering economy, the MENA IPO market is poised for continuous growth in the second half of 2024. The strong pipeline of upcoming listings signals a promising future for the region’s capital markets.
Conclusion:
In conclusion, the IPO landscape in the Middle East and North Africa is thriving, driven by robust market conditions and a diverse range of sectors looking to tap into the public markets. As the region continues to attract investors and companies seeking growth opportunities, the outlook for IPOs remains optimistic.