(MENAFN- The Peninsula) The banking sector continued to dominate GCC's corporate bond market in Q2, 2013. The Qatar National Bank (QNB) helped prop up the sector during this quarter through the issuance of its $1bn Euro Medium Term Note (EMTN) programme along with UAE's NBD, which also issued $1bn Tier one capital.
The PwC's "Capital Markets Watch GCC Survey" noted yesterday the initial public offering (IPO) activity in the GCC continued to drop in the second quarter with three new listings raising a total of only $48m. This compared to two IPOs in Q1 2013 raising an aggregate of $337m, representing an 86 percent decrease in total value raised. The average offering value dropped 94 percent this quarter compared to the same quarter last year where we witnessed four IPOs raising a total of $1.1bn.
The total value raised in Q2 2012 was the result of a stronger performance in the Saudi market, where out of the total four IPOs, three were Saudi based. Whilst the value of offerings significantly dropped this quarter, the number of offerings remained relatively stable at three IPOs.
The Muscat Securities Market (MSM) witnessed its first listing of the year with the $6m IPO of Sharqiyah Desalination Company which, whilst a small offering in value terms, received a strong response in the aftermarket. The other IPOs in Q2 2013 comprised two Saudi based insurance companies namely Aljazira Takaful Taawuni Company and AIG-ANB Cooperative Insurance Company, both listed on the Tadawul with offering values of $28m and $14m, respectively.
The most prominent share offering during the quarter was that of the Abu Dhabi based Al Noor Hospitals Group, which listed 33 percent of its equity on the premium segment of the London Stock Exchange (LSE), raising total proceeds of $342m. Al Noor is the second health care service provider in Abu Dhabi to have opted for an international listing after NMC Health Plc, which raised $187m in an IPO on the LSE in 2012.
Steve Drake, Head of PwC's Capital Markets business in the Middle East region said:
"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. 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."
In contrast, Europe's IPO markets have continued to gain momentum in Q2, building on the successful start to the year, with $6.8bn being raised, a 58 percent increase on the $ 4.3bn raised in the first quarter of 2013. Over 81 percent of proceeds raised in Q2 was generated from the top 10 deals.
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