According to the EY MENA IPO Eye Q2 2024 report, IPO activity in the MENA region remained resilient with 14 IPOs raising US$2.64b in proceeds during the second quarter of this year. The number of IPOs increased from the 13 listings in Q2 2023, with a corresponding increase in proceeds of 45.3% against the comparative quarter.
During Q2 2024 Dr. Soliman Abdul Kader Fakeeh Hospital Co. was listed on the Tadawul main market, raising the highest proceeds of the quarter – US$764m – and contributing 29% of the overall IPO proceeds. This was followed by Alef Education Consultancy LLC with its listing on the Abu Dhabi Securities Exchange (ADX), which contributed 19.5% of proceeds with the US$515m raised.
Brad Watson, EY MENA Strategy and Transactions Leader, says:
“Whilst the MENA equity markets continue to face challenges, Q2 2024 was a stronger quarter with a total of 14 IPOs raising US$2.6b. Eleven of the companies listed were in the KSA region (five of which were on the Tadawul main market). The most significant fundraise was by Dr. Soliman Abdul Kader Fakeeh Hospital Co. (US$764m).”
“Increased liquidity driven by higher oil prices, economic recovery, and positive market sentiment has kept the IPO activity in the region buoyant with a strong pipeline for H2 2024.”
Eight out of the 14 MENA IPOs listed in Q2 2024 had shown a positive return as of the 30 June 2024 share price in comparison with their IPO price, with Miahona Company achieving the highest gain of 90.4% within the period.
Stock exchanges across the MENA region exhibited varied performances. MSCI Emerging Markets Index ended Q2 2024 with a gain of 4.2%, making it the top-performing market in the GCC, followed by the gain of 1% from Qatar Exchange (QE) general index.
Saudi Arabia continues to lead regional IPO market
As with Q1 2024, the Kingdom of Saudi Arabia (KSA) stood at the forefront of the region’s IPO activity in terms of the number of listings – 11 out of 14 – in Q2 2024. A total of US$1.6b was raised, with the highest proceeds from Dr. Soliman Abdul Kader Fakeeh Hospital Co. at US$764m, followed by Saudi Manpower Solutions Company (SMASCO) at US$240m and Rasan Information Technology Company at US$224m. Five out of the 11 IPOs were listed on the Tadawul main market, including the top three contributors, with the remaining six taking place on the Nomu market with total proceeds of US$85.4m. Funds raised originate from a number of different sectors including healthcare, equipment services, commercial and professional services, materials, mineral resources, and finance and insurance services.
The Kingdom also leads in the IPO pipeline activity, with 14 Saudi companies announcing their intention to list by the end of the year.
United Arab Emirates strong contributor, Kuwait marks first listing since Q4 2019
The United Arab Emirates (UAE)’s Alef Education Consultancy LLC, listed on the Abu Dhabi Securities Exchange, raised US$515m in the academic and education services sector with its IPO. The listing of Spinneys 1961 Holding Plc, a family business, on the Dubai Financial Market (DFM) raised US$375m. Together, these two IPO listings in the UAE accounted for 33.8% of the quarter’s total proceeds.
Marking the first listing in Kuwait since Q4 2019, Beyout Investment Group (BIG) Holding Co. raised US$147m on the Kuwait Stock Exchange (KSE).
The remainder of 2024 is set to see robust activity in the IPO market, with an additional 16 private companies and seven funds across various sectors intending to list on the MENA exchanges. Of the companies intending to list, 14 are in KSA, including Riyad Capital LLC, United International Holding Co. and Arabian Mills for Food Products, among others. One company in the UAE has also obtained approval to list, alongside Go Bus in Egypt.
Gregory Hughes, EY MENA IPO Leader, says:
“The MENA IPO market continued to be led by the KSA and the UAE markets. However, the Kuwait Boursa welcomed their first listing since 2019. There is a continued focus on economic diversification away from oil and gas, with the MENA region continuing to see listings from a variety of sectors including health care, education, consumer goods and professional services. As we enter a phase of declining interest rates and continue to witness major country elections around the world, we will monitor with interest the subsequent impact on regional markets and IPO activity.”
Globally, IPO activity declined in comparison to Q2 2023; the number of IPOs dropped by 15% from 317 to 271, and proceeds decreased by 31% falling from US$40.4b to US$27.8b. The EMEIA region, however, made a remarkable comeback, with inflation approaching ‘normal’ levels, interest rates falling, stock markets rallying to hit all-time highs, and volatility remaining low. This comeback saw the region regain the top global IPO market share by number – 45% of deal volume and 46% of value – for the first time in 16 years.
Development in sustainable reporting
The International Financial Reporting Standards (IFRS) sustainability disclosure standards were applied for annual reporting periods beginning January 2024, marking a major step towards the full integration of sustainability reporting into the broader financial reporting process both globally and in the MENA region.
