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IPO momentum in the GCC is set to remain strong throughout 2024 on the back of continued government pledges for privatization, Fitch Ratingssays in a report. Growth will be anchored by minority stake sales by government-related entities.
In numbers: The Gulf saw 47 IPOs in 2023, slightly down from 48 a year earlier, according to the report. IPO proceeds were estimated at USD 11 bn, nearly half of the USD 23 bn raised in 2022.
BACKGROUND- Saudi was the 2023 IPO king, dominating issuances in the GCC with 35 of 46 IPOs tracked separately (pdf) by Kamco Invest (pdf) in January. The figure includes listings on both Tadawul’s main market as well as Nomu, the parallel market for smaller, earlier-stage companies. The UAE led the region last year in terms of total IPO proceeds.
The domestic IPO market is still going strong in 1Q 2024 with regional broadcaster MBC debuting on Tadawul in January in a USD 222 IPO. Its IPO is currently the world’s top performing this year, according to Bloomberg. Avalon Pharma has gone public on the main market and Moderns Mills recently priced its IPO at the top of the range. Al Modawat Specialized Medical Hospital and Pan Gulf Marketing have both made their debuts on Nomu.
And there’s lots more to come:
- eXtra is looking to sell 30% of its highly profitable consumer finance arm ;
- Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
- Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
- Aster DM Healthcare looks set to spin-off its GCC assets and seek a dual listing on Tadawul and in the UAE.
It’s not an IPO, but: Aramco is thought to be inching closer to a blockbuster secondary sale of shares.
What the other pundits are saying: Ratings agency S&P Global said earlier this month that it expects a “sustained IPO activity” this year.
Capital market reforms are key: “Governments aim to attract investors through reforms, such as the establishment of IPO funds and the relaxation of foreign ownership restrictions, which is shown by the GCC’s increased share in emerging markets indices,” the report said.
