Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

2.4 billion raised from 16 MENA market IPOs in H1  Join our daily free Newsletter

MENAFN - Arab News - 23/08/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab News) The MENA IPO (initial public offering) market performed robustly in H1 2014 raising 2.4 billion from 16 IPOs. This has been the market's best performance in terms of volumes and proceeds in the aftermath of the economic crisis in 2008 when it raised 9.4 billion from 36 issues in H1 2008. The MSCI upgrading Qatar and the UAE to emerging markets from frontier markets sustained investment in developing social infrastructure and capacity building to host upcoming global events such as FIFA 2022 in Qatar and Expo 2020 in Dubai are the catalysts for recovery in regional equity markets. The probability of Saudi Arabia's equity market opening up to foreign investments also boosted recovery.

IPO listings

The economic crisis in 2008 which led to a meltdown in global equity markets also affected the equity markets in MENA. Despite sustained public spending by GCC economies to offset the fallout from the global economic slowdown business and investor sentiment suffered due to lack of liquidity in equity markets. A decline in trading volumes and negative investor sentiment strained stock markets causing many local companies to cancel or postpone IPOs. The Tadawul All Share Index contracted 55.2 percent in 2008. The Dubai Financial Market General Index lost 73 percent falling from 6003.3 at the beginning of 2008 to 1636.29 by the end of the year. From 200813 15 IPOs were cancelled and the number of listings declined from 52 in 2008 to 18 in 2009.

The IPO volumes and capital raised remained low after 2008. Liquidity in the market dried up further as banks in a few GCC countries like Saudi Arabia ceased lending for stock purchases due to high probability of defaults and consequently hefty provisions for impaired stock loans. Local companies chose other fundraising routes like sukuk over IPOs. Sukuk worth around 19.5 billion was issued in MENA in 2011 an increase of 183 percent over that in the previous year. In the same year IPO listings were the lowest with less than 1 billion raised down 67.9 percent from the previous year.

Equity fund raisings

As global economy recovered and liquidity increased the MENA IPO market started inching toward improvement in early 2013. In 1H 2013 14 IPOs raised 2.1 billion against 1.3 billion raised through nine IPOs in H1 2012. The announcement of the upgrade of the UAE and Qatar from Frontier Markets to MSCI Emerging Markets status on June 11 2013 provided the much needed impetus to regional equity markets to continue the rally into the second half of 2013 and forward. As investor confidence was restored the average daily turnover in MENA rose over 70 percent to 3.50 billion in 2013 from 2.0 billion in 2012. The Qatar and Abu Dhabi stock exchanges surged nearly 50 percent Y-o-Y by the end of May 2014. The Dubai Financial Market General Index rose 110 percent until May 2014 from that in the previous comparative period.

Investor confidence

Increased foreign ownership limit especially in the Qatari market that raised foreign investment limits to 49 percent from 25 percent in May 2014 is expected to improve the flow of foreign funds into regional equity markets. This would also set IPO markets in momentum. The likely opening of the Saudi Arabian stock market-the largest equity market with a market capitalization of around 560 billion as of July 2014 in MENA-to foreign investors would bode well for MENA markets. The significant investments in developing the necessary infrastructure for Expo 2020 in Dubai and FIFA 2022 in Qatar could help improve business and investor sentiment in the region.

The number of private equity exits through equity listings started declining in 2008 as firms held off monetizing returns on investments due to poor valuations; however the number of exits is expected to pick up. The number of PE exits in MENA fell from 18 in 2008 to one in 2009. As valuations improve the pressure to monetize investments could contribute significantly to IPO activity in the future. In H1 2014 three of the seven private equity exits were through the IPO route.

GCC nations

GCC countries had the largest share of IPO listings in MENA constituting nearly 78 percent of capital raised from 64 IPOs between 2009 and 2014. In H1 2014 they accounted for 90 percent of the capital raised through IPOs in MENA with 10 IPOs raising nearly 2.1 billion. Saudi Arabia is the prime issuer in terms of number of issues and capital raised in the MENA IPO market. The country accounted for nearly 38.5 percent of total proceeds raised from 41 IPOs between 2009 and 2014.

Saudi Arabia also led with four IPOs in H1 2014 including the much anticipated listings of Abdul Mohsen AlHokair Group and Al-Hammadi Company accounting for 25 percent of total issued value. The Finance Ministry's announcement for the initial listing of Saudi Arabia's largest lender National Commercial Bank is expected to spur IPO activity in Saudi Arabia.

The largest deal in H1 2014 by Mesaieed Petrochemical Holding Company a subsidiary of Qatar Petrochemical garnered 905.3 million. It accounted for about 40 percent of total capital raised in 1H 2014 and was five times oversubscribed. This was Qatar's first IPO since 2010. Three new issues in the UAE contributed to about 20 percent of total capital raised in MENA. The issue of Marka a chain of retail and food outlets which was not operational at the time of listing was 36 times oversubscribed.

Financial services

In terms of capital raised industrials (includes petrochemical companies) and IT & telecom led the IPO activity raising over 50 percent of total capital. The issue of Gulf Marine Services of the UAE and Mesaieed Petrochemical Holding of Qatar in 2014 constituted nearly 50 percent or 1.2 million of the capital raised. The financial services sector saw the highest number of IPO listings accounting for around one-third of total listings since 2009.

 


Arab News




  MENA News Headlines
 Oct 23 2014 - 18m vehicles likely on Saudi roads by year-endArab News
(MENAFN - Arab News) Eighteen million licensed vehicles are likely to be on Saudi roads by the end of this year from 17 million last year according to a study published by Al-Eqtisadiah daily. The ...

 Oct 23 2014 - Saudi Aramco, Chinese Sepco sign dealMENAFN
(MENAFN) Saudi Aramco announced it has signed a contract with a Chinese group for a project to help expand the capacity of the main gas pipeline across Saudi Arabia, in a project that aims to improve ...

 Oct 23 2014 - Qatar Digital Library launchedThe Peninsula
(MENAFN - The Peninsula) Over half a million pages of archives and manuscripts on the history of Qatar and the Gulf and Arab Islamic sciences are available free online with the launch of Qatar ...

 Oct 23 2014 - Qatar- Deals with Turkey agencies to educate Syrian refugeesThe Peninsula
(MENAFN - The Peninsula) H H Sheikha Moza bint Nasser, Chairperson, Education Above All, yesterday witnessed the signing of two memorandums of understanding between EAA and two Turkish development ...

 Oct 22 2014 - Saudi- Pak expats recall soldiers' braveryArab News
(MENAFN - Arab News) Mavra a Riyadh-based women's literary and cultural organization celebrated Pakistan Defense Day aimed at paying tribute to the country's armed forces.In the first part of the ...

 Oct 22 2014 - China Fiscal Revenue Rises 6.3% in SeptemberQatar News Agency
(MENAFN - QNA) China's fiscal revenue rose 6.3% year on year to 995.3 billion yuan about (162.6 billion US dollars) in September, quickening from a 6.1% rise in August, the Chinese Ministry of ...

 Oct 22 2014 - Tokyo Stocks End Sharply up WednesdayQatar News Agency
(MENAFN - QNA) Tokyo stocks ended sharply higher Wednesday, boosted by overnight rises in European and US stocks. The 225-issue Nikkei Stock Average rose 391.49 points, or 2.64%, from Tuesday to ...

 Oct 22 2014 - Cooperating Robots Developed in China-US ProjectQatar News Agency
(MENAFN - QNA) An award-winning collaboration between Chinese and American researchers has pointed the way forward for the use of cloud computing to link different robots and make them more ...

 Oct 22 2014 - Summary of Local News Released Tuesday - 3-Qatar News Agency
(MENAFN - QNA) - World Innovation Summit for Health (WISH) has appointed chairperson for the WISH Dementia Forum that will mull current challenges, innovation in care-giving, financial models and ...

 Oct 22 2014 - Ban Calls for Investigation into Israeli Attacks on UN Facilities in GazaQatar News Agency
(MENAFN - QNA) United Nations Secretary-General Ban Ki-moon called for a thorough investigation into incidents where UN facilities sustained hits and many innocent people were killed by the Israeli ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help