The Middle East and North Africa (MENA) markets experienced remarkable growth in 2023, witnessing a total of 48 Initial Public Offerings (IPOs) that generated an impressive $10.7 billion in revenues. The surge in IPO activity underscores the region’s growing prominence as a hub for global investments.
A significant portion of the IPO proceeds totalling 58 percent can be attributed to five key listings, primarily in the energy and logistics sectors. This concentration highlights the strategic importance of these industries in the economic landscape of the MENA region. According to Ernst & Young’s EY MENA IPO Eye Q4 2023 Report, the final quarter of 2023 alone witnessed 19 IPOs that raised a substantial $4.9 billion in proceeds.
ADES Holding Company emerged as the MENA’s IPO leader, contributing 25 percent of the total proceeds. Following closely came Pure Health Holding PJSC with a 20 percent contribution.
All Q4 listing activities occurred in the GCC region, with Egypt being the sole non-GCC country reporting IPOs in the MENA region throughout 2023. The dynamic market conditions and investor confidence were evident. For this reason, 11 out of the 19 Q4 2023 IPOs recorded a first-day gain in share price.
Looking ahead, the MENA region has a robust IPO pipeline for 2024, featuring 29 companies across various sectors. Besides, Saudi Arabia and the UAE are spearheading the expected volumes. In addition to the GCC, Egypt plans four IPOs, indicating the diverse range of opportunities in the region.
Saudi Arabia leads
Saudi Arabia leads the way in terms of IPO activity in the MENA region with 14 of the 19 listings in Q4 2023. Notably, ADES Holding Company marked the highest proceeds at $1.2 billion. Following closely came SAL Saudi Logistics Services Company at $0.7 billion. Both IPOs were listed on the Tadawul Main Market. The remaining 12 IPOs raised $140 million in total and took place on the Nomu, the Parallel Market. Nomu also witnessed the quarter’s only direct listing in the MENA region, Almujtama Alraida Medical Co.
UAE’s financial markets
The report stated that among the MENA IPO listings, the Abu Dhabi Securities Exchange (ADX) welcomed three IPOs in Q4 2023. They raised a combined total of $1.8 billion. These included Pure Health Holding PJSC, valued at $987 million, Investcorp Capital plc at $451 million, and Phoenix Group PLC at $371 million. Particularly, Pure Health Holding PJSC reported the highest first-day gain of 76 percent. Additionally, there was one new listing in the transportation sector on the Dubai Financial Market (DFM) which is Dubai Taxi Company PJSC, worth $315 million.
Oman sets IPO records
The Muscat Stock Exchange (MSX) saw the largest IPO to date with OQ Gas Networks SAOC raising $772 million. Meanwhile, Oman Investment Authority (OIA), the country’s sovereign wealth fund, is preparing to launch multiple IPOs and list state assets to strengthen its capital markets which will contribute to the MENA market’s growth.
In Q4 of 2023, the UAE hosted the 28th United Nations Climate Change Conference (COP28). During the conference, the DFM introduced a platform to trade carbon credits that allows companies to manage their residual and unavoidable carbon emissions. This plays a major role in supporting their pursuit of decarbonization and net-zero targets. In addition, ADX launched the FTSE Russell ESG Screened Index in time for COP28. The index provides investors with a transparent and tradable environmental, social, and corporate governance (ESG) benchmark that ranks companies based on their ESG scores. Therefore, this promotes sustainable business practices among ADX-listed companies.
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