Emerging IPO markets leapfrog London’s as it hits a 21st century low

Emerging markets like Malaysia and Oman have outperformed London — and European markets — in IPO activity this year, underscoring the rise of Middle Eastern and Asian exchanges as global IPO hubs, Bloomberg reports. The UAE, Oman, and Malaysia have secured higher rankings in Bloomberg’s global IPO venue list, with the UK landing the 20th place, while Oman secured the 14th spot, Saudi Arabia the 7th, and the UAE the highest at fifth globally. This marks a significant shift from London’s heyday as a staple IPO market.

Middle East IPOs are thriving: The Middle East and Asia accounted for over half of global IPO IPO proceeds in 2024. Notable listings include Abu Dhabi-based Lulu Retail’s USD 1.7 bn offering and a USD 2 bn IPO by a unit of Oman’s state oil company. Dubai’s Talabat also completed a USD 2 bn IPO, now the world’s largest tech IPO of 2024.

London’s woes: London’s IPO market declined by 9% y-o-y to USD 1 bn in 2024, with the number of London-listed firms falling to the lowest on record. Only about a dozen companies listed on the LSE this year, none among the global top 100, with the largest raising a modest GBP 150 mn. The UK’s performance has been undermined by low valuations, cautious domestic investors, and increasing competition from other financial hubs.

A lot of delistings are another symptom of a bigger problem: In addition to the shrinking IPO pipeline, the UK stock market has faced a wave of delistings and takeovers. Some 45 companies exited the London Stock Exchange this year, marking the highest tally since 2010 — including big names such as Just Eat Takeaway.com and Ashtead Group moving each to the Netherlands and the United States — and many medium-cap firms acquired by private equity giants like KKR and EQT.

Things may look up: UK authorities are implementing sweeping reforms to revive its listing market, including easing rules on dual-class shares and disclosures. Several companies, including Shein and Canopius Group, are reportedly preparing to list in 2025. However, experts suggest that significant momentum is required to restore investor confidence and make the UK competitive again.

MARKETS THIS MORNING-

It’s a sea of red among Asian markets, as investors mulled China’s confirmation of further stimulus next year. Hong Kong’s Hang Seng index fell 1.4%, while mainland China’s CSI 300 was down 0.9%, and Japan’s Nikkei fell 1.2%. Wall Street futures are also near the flatline following a slump in performance on the Nasdaq, S&P 500, and the Dow Jones.

THE CLOSING BELL-

The DFM rose 0.3% yesterday on turnover of AED 401.9 mn. The index is up 18.5% YTD.

In the green: National Cement Company (+13.0%), Emirates Investment Bank (+11.1%) and Emaar Development (+4.4%).

In the red: BHM Capital Financial Services (-9.9%), Dubai Refreshment Company (-7.4%) and International Financial Advisors (-5.3%).

Over on the ADX, the index closed up 0.1% on turnover of AED 896.1 mn. Meanwhile, Nasdaq Dubai rose 0.4%.