IPO activity in the Middle East and North Africa (MENA) region maintained strong momentum in the first quarter of 2024, with 10 initial public offerings in Saudi Arabia and the UAE, raising a total of $1.2 billion. The Parkin Company in the UAE raised the highest proceeds for the quarter at $429 million, contributing 37.2 per cent of the total IPO value. The IPO was oversubscribed 165 times and had a first-day gain of 35 per cent. This is the third Roads and Transport Authority (RTA) asset to have listed after Salik and the Dubai Taxi Company (DTC).
Following the IPO of Spinneys in the second quarter, the UAE has significant upcoming listings in 2024, including LuLu Group and Etihad Airways. Gregory Hughes, EY Mena IPO leader, stated that there is no sign of a slowdown in IPO activity, with companies continuing to show interest in listing on stock exchanges in the region. The UAE also saw a decline of 87 per cent in IPO proceeds compared to the same period last year. In contrast, other GCC countries did not have any IPOs during the period.
Globally, the first quarter of 2024 witnessed a total of 287 IPOs, raising $23.7 billion, a 7.0 per cent increase in value year on year. Saudi Arabia leads with 21 announced IPOs, followed by the UAE with one. Raya Information Technology in Egypt and Crédit Populaire d’Algérie in Algeria have also announced their intentions to list on stock exchanges. Brad Watson, EY Mena strategy and transactions leader, noted the GCC region’s robust pipeline for IPOs and the positive start to the year.
In terms of stock exchange performance, the Egyptian Exchange (EGX30) showed an 8.0 per cent gain in Q1 2024, followed by Boursa Kuwait Premier Market with 7.5 per cent and the Dubai Financial Market with 4.6 per cent. Eight out of the 10 MENA IPOs had a positive return compared to their IPO price, with MBC Group achieving the highest gain of 128 per cent. Saudi Arabia dominated the listing activity once again in Q1 2024, with Modern Mills Company raising $724 million, followed by MBC Group and Middle East Pharmaceutical Industries Company.
Saudi Arabia also led in pipeline activity for the region, with companies like Saudi Manpower Solutions Company, Miahona, and Panda Retail Company announcing their plans to list. The UAE has taken a step towards enhancing transparency and promoting sustainable practices in its financial markets by issuing mandatory environmental, social, and governance (ESG) reporting guidelines for listed companies on the Abu Dhabi Securities Exchange (ADX). This move underscores the region’s commitment to responsible and sustainable business practices.
Overall, the MENA region continues to witness strong IPO activity, with various companies showing interest in listing on stock exchanges in Saudi Arabia and the UAE. The positive start to the year in terms of IPO proceeds and stock exchange performance indicates a healthy market environment. As more companies announce their plans to list in the upcoming quarters, the region’s IPO market is expected to remain vibrant and dynamic, providing investors with opportunities to participate in the region’s economic growth and diversification efforts.
