MENA IPO outlook remains positive in Q3 despite global slowdown

The EY MENA IPO Eye Q3 2024 report reveals a cautiously optimistic IPO market in the Middle East and North Africa (MENA) region, with five IPOs collectively raising $0.93bn.

This marks a 76.8 per cent year-on-year (YoY) increase in value, primarily driven by the substantial $877m raised by NMDC Energy in the UAE.

While global IPO markets saw a modest slowdown, MENA markets continue to show resilience, with more IPOs anticipated by year-end.

UAE hosts the largest IPO of Q3

The UAE’s Abu Dhabi Securities Exchange (ADX) saw the region’s largest IPO of the quarter with NMDC Energy , an EPC solutions and marine construction company, raising $877m.

This accounted for nearly 95 per cent of the quarter’s total IPO proceeds in the MENA region, underscoring the UAE’s expanding IPO landscape. ESG goals remain a focal point, with the UAE’s upcoming law mandating emissions reporting and compliance with decarbonization strategies across sectors, including free zones, starting in May 2025.

 Saudi Arabia leads IPO volume with listings on Nomu Market

Saudi Arabia was once again the leader in IPO volume, with three out of the five regional IPOs in Q3. The kingdom’s listings raised a combined $27m, with Tharwah Human Resources Company leading at $12m, followed by ASG Plastic Factory Company and Al Ashghal Almoysra Company.

All three companies were listed on the Nomu – Parallel Market, which continues to attract small and medium-sized enterprises (SMEs) seeking capital. In addition, two companies, Naas Petrol Factory Company and Arabian United Float Glass (UFG) Company, opted for direct listings on the Nomu market.

Egypt secures MENA’s first non-GCC IPO of 2024

Egypt marked a significant milestone for the region with its first non-GCC IPO of the year. Act Financial’s listing on the Egyptian Exchange (EGX) achieved the highest post-IPO gain in Q3, up 16.3 per cent. The listing is also the EGX’s first in two years, highlighting renewed momentum in Egypt’s market.

Upcoming IPO pipeline remains strong

Looking ahead, the MENA region is preparing for an active final quarter of 2024, with 11 private companies and five funds planning IPOs across various sectors.

Several prominent companies, such as LuLu Group International (ADX), Talabat Middle East (DFM), and Oman’s OQ Exploration & Production (MSX), have already announced plans to go public.

Read: Lulu Retail boosts IPO size to 30 per cent on strong demand

In Saudi Arabia, Tamkeen Human Resources Company, Arabian Company for Agricultural and Industrial Investments, and Nice One Beauty Digital Marketing have gained Capital Market Authority (CMA) approval, adding to the country’s robust IPO pipeline.

The MENA region’s stock exchanges posted resilient performances despite regional challenges.

Egypt’s EGX30 index led the way with a 26.8 per cent year-to-date increase, and the MSCI Emerging Markets Index was the best-performing GCC index, up 14.3 per cent by Q3 close.

Of the five IPOs this quarter, four recorded gains over their listing prices, reflecting sustained investor confidence in the region’s offerings.

Outlook

Brad Watson, EY MENA strategy and transactions leader, emphasised that the MENA IPO market remains strong despite geopolitical challenges: “With IPO proceeds reaching  $0.93bn, largely due to NMDC Energy PJSC’s listing on ADX, we are confident that MENA’s IPO market will remain active, supported by a solid pipeline across diverse sectors.”

EY’s MENA IPO Leader, Gregory Hughes, noted, “The third quarter may typically see reduced activity, but MENA saw five IPOs, including the first listing on the EGX since 2022. The Tadawul Nomu – Parallel Market has solidified its role as an attractive avenue for SMEs in Saudi Arabia, making it the region’s most active exchange for IPOs in 2024.”

The MENA IPO market is expected to close out 2024 on a high note, driven by government support for economic diversification and growing interest from regional and global investors in the MENA region’s dynamic opportunities.