MENA IPOs Raise $726.2m In Q4 2013

A total of seven initial public offerings (IPO) in the MENA region raised around $726.2 million in the fourth quarter of 2013, according to the Ernst & Young (EY) MENA Q4 2013 IPO update.

IPOs in the region recorded a 133 per cent increase in terms of volume and 114 per cent increase in terms of value compared to Q4 2012.

The UAE-based firm Damac Real Estate launched the largest IPO in the region in Q4 2013, raising $348 million in a global depository receipt (GDR) offering.

There were two other IPOs from the UAE, with two in Oman and one each in Saudi Arabia, Morocco and Tunisia.

“The MENA IPO market is rebounding and recovering,” said Phil Gandier, MENA Transaction Advisory Services Leader, EY.

“The improving macro-economic backdrop driving up stock market valuations and rising investor confidence in key markets saw the IPO year end on a high.”

Gandier said that the IPO activity in Q4 has seen an increase in both volume and value compared to 2012, registering the highest value of IPOs since 2008.

“Additionally, in our Capital Confidence Barometer report, 73 per cent of executives in MENA see the local economy improving, with the highest percentage of confidence being in indicators such as economic growth (70 per cent), employment growth (64 per cent) and credit availability (59 per cent).

“The confidence in these indicators bodes well for the region as economic growth and credit availability are key drivers for the IPO market,” he said.

The MENA region raised around $3 billion through 23 IPOs in 2013, up 64 per cent in terms of volume and 51 per cent in terms of value compared to 2012.

Tunisia led with nine IPOs, followed by five in Saudi Arabia, four in Oman, three in the UAE and one each in Iraq and Morocco.

“Family businesses are increasingly looking at IPOs as a means of monetising wealth, raising capital and institutionalising the business and the MCSI upgrading of Qatar and UAE to emerging markets may help to boost interest in the region,” said Gandier.

He added that a number of businesses are preparing to offer an IPO over the next nine months.

“If the macroeconomic conditions in the region continue to improve, the next 18 months to two years will be quite busy,” said Gandier.