GCC IPOs Raise $48m In Q2 2013

Political instability in Egypt and other countries in the Middle East have dampened investor confidence resulting in low offering values.

Initial public offering (IPO) activity in the GCC continued its depressing performance into the second quarter of this year with three new listings earning only $48 million in total.

An IPO market watch report from PwC observed that total IPO values in Q2 2013 dropped 86 per cent compared to the $337 million raised by two listings in the first quarter of the year.

The average offering value dropped 94 per cent this quarter compared to the same quarter last year where four IPOs raised $1.1 billion. Last year’s robust performance was due to the strong performance of the Saudi market, which had three out of four IPOs offered, the report said.

IPO activity remains active in the Kingdom with two of the three offerings in Q2 2013 coming from Saudi-based insurance companies namely Aljazira Takaful Taawuni Company ($28 million) and AIG-ANB Cooperative Insurance Company ($14 million).

Abu Dhabi based Al Noor Hospitals group, which listed 33 per cent of its equity on the premium segment of the London Stock Exchange (LSE), was the most prominent share offering from the region with a total of $342 million.

The report attributed the sluggish investor confidence and low offering values to the political instability in Egypt and other countries in the Middle East.

“Until volatility in global equity markets and the political situation stabilises, regional equity markets are likely to remain subdued. However, we continue to see interest in companies looking to list within the next 12 to 18 months,” said Steve Drake, head of PwC’s capital markets business in the Middle East region.