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MENA Watch: IPOs kick off Q1 2024 with strong momentum

The UAE has one announced IPO, whereas the KSA has 21 announced IPOs

The EY MENA IPO Eye Q1 2024 study states that the MENA region’s IPO activity is still gaining significant traction. The United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) saw ten initial public offerings (IPOs) during the quarter, totalling USD 1.2 billion in proceeds.

In the first quarter of 2024, there were 287 initial public offerings (IPOs) worldwide, raising USD 23.7 billion, representing a 7% YoY increase in value. Market players had to negotiate uncertainty resulting from recent economic swings and an election year worldwide.

In 2024, ten funds and twenty more private businesses from a range of industries plan to launch on MENA exchanges. The UAE has one announced IPO, whereas the KSA has 21 announced IPOs. Two more GCC companies, Crédit Populaire d’Algérie in Algeria and Raya Information Technology in Egypt, have announced their initial public offerings.

Regarding the performance of MENA stock exchanges, the Egyptian Exchange (EGX30) took the lead with an 8% increase in Q1 2024, ahead of Dubai Financial Market (DFM) with 4.6% and Boursa Kuwait Premier Market with 7.5%. Eight of the ten MENA IPOs had returned more than their IPO price by the end of the quarter, with MBC Group posting the biggest gain of 128%.

The first quarter of 2024 got off to a good start with 10 initial public offerings (IPOs) focused in the GCC region, raising a total of US$1.2b, according to Brad Watson, EY MENA Strategy & Transactions Leader. With nine IPOs in a variety of industries, Saudi Arabia remained the leader in listing activity, and DFM was happy to see its first listing in 2024. The GCC and North Africa continue to have a strong pipeline of companies that have declared their intention to list.

Regarding IPO listings, Saudi Arabia remains in the lead. In terms of listing activity, the KSA led once more in the first quarter of 2024. Modern Mills Company raised USD 724 million in the largest and second-largest initial public offering (IPO) in the country, which accounted for 27.3% of the total proceeds. MBC Group (USD 222 million) and Middle East Pharmaceutical Industries Company (USD 131 million) came next.

The Tadawul Main Market listed all three initial public offerings. The remaining six listings brought in a total of USD 57 million on the Nomu-Parallel Market. The money came from several industries, including media and entertainment, F&B, and health care.

With multiple companies, including Miahona, Panda Retail Company, and Saudi Manpower Solutions Company (SMASCO), announcing their plans to list, the Kingdom also maintained its lead in pipeline activity for the MENA region.

In Q1 2024, the UAE will witness the biggest initial public offering (IPO) in the region. With USD 0.4 billion on DFM, Parkin Company PJSC in the UAE generated the largest proceeds in the region in Q1 2024, accounting for 37.2% of the total IPO value.

Over 165 times as many people registered for the IPO as there were listings in the quarter, and the largest first-day gain was 35%. After the listing of Salik and the Dubai Taxi Company (DTC), this is the third asset of the Roads and Transport Authority (RTA). Significant forthcoming listings from the nation included Spinneys, LuLu Group, and Etihad Airways.

Furthermore, ESG factors are becoming more and more prominent. For listed firms on the Abu Dhabi Securities Exchange (ADX), the UAE has released mandatory environmental, social, and governance (ESG) reporting rules.

The action is a major step in the direction of encouraging sustainable practices and improving transparency in the financial markets of the region. Moreover, the Muscat Stock Exchange (MSX) will begin accepting voluntary ESG disclosure criteria in 2023, and by 2025, sustainability reporting will be required.

The Saudi Green Initiative, on the other hand, shows a dedication to environmental preservation and a move toward renewable energy sources. Among its objectives is the planting of 10 billion trees by 2030. The GCC can promote sustainable growth, draw ethical investments, and help create a more environmentally friendly global economy by adopting ESG reporting.

“The start of the year has been excellent with no hint of a slowing in IPO activity,” says Gregory Hughes, EY MENA IPO Leader.

The successful listing of Parkin Company PJSC on the DFM showed the government of Dubai’s ongoing commitment to its privatisation policy, which includes the listing of state-owned businesses as a means of promoting economic diversity in the country.

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