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Our friends at HSBC expect the local capital market to maintain its momentum in 2H 2024 on the back of a strong pipeline of IPOs and potential investments available to local and foreign investors, HSBC Saudi CEO Faris AlGhannam told Argaam on the sidelines of the HSBC GCC Conference in London. AlGhannam also sees sustained activity in the local debt, sukuk, and bond markets during the back half of the year.
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Tadawul had a strong showing in 1H, surpassing the first half of 2023 thanks to ongoing reforms and diversification projects drawing in FDI, AlGhannam said. These developments are setting up the local stock market to be the largest and most liquid in the GCC this year, he added. Additionally, the Kingdom’s inclusion in major international indices since 2019 — such as MSCI, FTSE Russell and S&P Dow Jones and the EMBI sovereign bond index — has further boosted FDI, contributing to Tadawul posting 11% growth in 2023.
REMEMBER- Saudi accounted for the lion’s share of proceeds flowing into Gulf IPOs in 1H 2024, raising USD 2.1 bn in IPO proceeds during the period, investment bank Kuwait Financial Centre (Markaz) said in a report earlier this month. Out of a total of 23 offerings in the Gulf during the first half, 19 were in the Kingdom with three in the UAE, and one in Kuwait.
HSBC advised on more than half of the transactions that went to market in 1H 2024, according to AlGhannam. These include Fakeeh Care Group’s IPO, which was the largest IPO on Tadawul during the period. The bank also advised Aramco on its follow-on offering, which recently raised a total of USD 12.4 bn in proceeds by exercising the greenshoe option following the end of the stabilization period.
As for the pipeline? There’s lots more where that came from:
- Electronics retailer eXtra plans to IPO the unit that owns and operates Tasheel, its consumer finance arm, on Tadawul. The transaction is expected to hit the market this fall.
- The Fourth Milling Company (MC4) and Arabian Mills Food Products have been cleared by the CMA to go public on Tadawul;
- Hotels and resorts operator Boudl has said it intends to go public;
- 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;
- Perfume maker Arabian Oud is said to have appointed bankers ahead of a share sale;
- PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
- Budget airline Flynas is reportedly looking to go public this year;
- Plastics products maker ASG Plastic Factory ia taking a 10.6% stake to Nomu;
- Local contractor Al Ashghal Almoysra is set to debut a 20% stake on the parallel market.
