(MENAFN- Khaleej Times) Despite strong rallies in UAE capital markets and the recent conferring of emerging-market status to the country's and Qatar's stock market by MSCI, initial public offering (IPO) activity in the Gulf region remained depressed during the first six months of 2013.
The downward trend continued into the second quarter, with three new listings raising a total of only $48 million, according to a statement issued on Tuesday by PricewaterhouseCoopers, or PwC.
This compared to two IPOs in the first quarter of 2013, raising an aggregate of $337 million, representing an 86 per cent decrease in total value raised.
The average offering value dropped 94 per cent this quarter compared to the same quarter last year, where four IPOs raised more than $1 billion.
The total value raised in the second quarter of 2012 was the result of a stronger performance in the Saudi market, where three out of the four IPOs were Saudi-based. While the value of offerings significantly dropped this quarter, the number of offerings remained relatively stable at three.
The most prominent share offering during the quarter was that of the Abu Dhabi-based Al Noor Hospitals Group, which listed 33 per cent of its equity on the premium segment of the London Stock Exchange, or LSE, raising total proceeds of $342 million.
Al Noor is the second healthcare service provider in Abu Dhabi to have opted for an international listing after NMC Health, which raised $187 million in an LSE IPO in 2012.
The Muscat Securities Market witnessed its first listing of the year with the $6 million IPO of Sharqiyah Desalination Company which, while a small offering in value terms, received a strong response in the aftermarket.
The other IPOs in the second quarter comprised two Saudi-based insurance companies - Aljazira Takaful Taawuni Company and AIG-ANB Cooperative Insurance Company, both listed on the Tadawul - with offering values of $28 million and $14 million, respectively.
"Concerns looming over the economic slowdown in certain global markets and the elevated political instability in Egypt and other countries in the Middle East would appear to have dampened investor appetite and contributed to the low offering values we have seen this quarter," Steve Drake, head of PwC's Capital Markets business in the Middle East, said in the statement.
"Until volatility in global equity markets and the political situation stabilises, regional equity markets are likely to remain subdued. However, we continue to see interest in companies looking to list within the next 12 to 18 months."
The GCC bond market, similar to the previous quarter, saw significant issuances from the Kuwait Central Bank, which raised a total of $6.7 billion from issuances of its treasury bills and long-term government bonds.
The banking sector continued to dominate the corporate bond market with noteworthy issuances by both UAE- and Qatar-based banks. These included Emirates NBD's $1 billion Tier One capital issue, another $1 billion issue by Qatar National Bank under its euro medium-term note programme and issuances by the National Bank of Abu Dhabi and Commercial Bank of Dubai, which raised $465 million and $500 million, respectively.
After a quiet first quarter, the Saudi sukuk market was seen to be one of the most active in the second, with sizeable sukuk issuances on both the corporate and sovereign fronts. These included sukuks issued by Islamic Development Bank, raising total proceeds of $1 billion, and Saudi Electricity Company and Sadara Chemicals Company each raising $2 billion.
Another notable issuance during the quarter was Dana Gas', which raised $850 million and which was issued to refinance its debt.
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