GCC region sees 10 IPOs raise $1.2bn in Q1 2024: EY

The first quarter (Q1) of 2024 proved to be a robust period for initial public offerings (IPOs) globally, with 287 IPOs raising a total of $23.7bn, marking a 7 per cent increase in value year on year (YoY), revealed the latest EYMENA IPO Eye Q1 2024 report.

Despite uncertainties stemming from economic fluctuations and a global election year, market participants demonstrated resilience, contributing to the positive trend in IPO activity, EY found.

Closer to home, the MENA region witnessed a surge in IPO announcements, with an additional 25 private companies and 10 funds across various sectors intending to list on the region’s exchanges in 2024.

Saudi Arabia leads the way for IPOs

Brad Watson, EY MENA Strategy and Transactions leader, highlighted the positive start to Q1, saying that it started off “on a positive note with 10 IPOs concentrated in the GCC region, raising a total of $1.2bn”.

Watson added: “Saudi Arabia continued to dominate listing activity with nine IPOs across diverse sectors, while Dubai Financial Market (DFM) welcomed its first listing in 2024. The region has retained a robust pipeline, with several companies in the GCC and North Africa having announced their intentions to list.”

Saudi led the pack with 21 announced IPOs, followed by the UAE with one.

Eight out of the 10 MENA IPOs recorded positive returns compared to their IPO price, with MBC Group achieving the highest gain of 128 per cent.

Saudi Arabia’s leadership in IPO activity was further boosted by the successful IPOs of Modern Mills Company, MBC Group and Middle East Pharmaceutical Industries Company.

Modern Mills Company’s IPO, raising $724m, accounted for 27.3 per cent of the overall proceeds, highlighting investor confidence in the region’s market.

Outside of the GCC, IPO announcements include Raya Information Technology in Egypt and Crédit Populaire d’Algérie in Algeria reflected the region’s growing appetite for capital market activities.

UAE IPO: Parkin Company

In the UAE, Parkin Company raised the highest proceeds in the region in Q1 2024 with $0.4bn on DFM, contributing 37.2 per cent of the total IPO value.

The oversubscribed IPO, which saw a 165 times subscription rate, reflects investor enthusiasm for opportunities in the UAE market.

Furthermore, the UAE’s issuance of mandatory environmental, social, and governance (ESG) reporting guidelines for listed companies on Abu Dhabi Securities Exchange (ADX) signals a commitment to transparency and sustainable practices.

The move aligns with global trends towards ESG integration in financial markets and positions the GCC region to attract responsible investments and foster sustainable growth.

Gregory Hughes, EY MENA IPO Leader, emphasised the strong start to the year and highlighted the successful listing of Parkin Company.

“The successful listing of Parkin Company on the DFM demonstrated a continued commitment toward the Dubai government’s privatisation programme that involves listing state-owned companies as part of the nation’s economic diversification drive,” he said.

With IPO activity showing no signs of slowing down, the MENA region remains poised for continued growth and development in its capital markets.

MENA stock exchanges that did well

In terms of stock exchange performance, the Egyptian Exchange emerged as the top performer in the MENA region, recording an 8 per cent gain during Q1 2024.

Boursa Kuwait Premier Market and DFM followed closely with gains of 7.5 and 4.6 per cent respectively.