The Middle East and North Africa (MENA) IPO market is expected to experience significant growth in the second half of 2024, with 16 private companies and seven funds planning to list on the region’s exchanges. The increased activity follows a strong first half led by the UAE and Saudi Arabia, driven by ongoing privatization efforts, improved liquidity, economic recovery, and positive market sentiment.
In the first half of 2024, IPO activity in the MENA region witnessed a 45.3% increase, raising a total of $2.64 billion. According to an Ernst & Young report, 14 of the upcoming listings are in Saudi Arabia, with companies like Riyad Capital, United International Holding Co., and Arabian Mills for Food Products intending to list. Additionally, one company in the UAE has received approval to list, along with Go Bus in Egypt.
The focus on economic diversification away from oil and gas is evident in the MENA region, with listings spanning various sectors such as healthcare, education, consumer goods, and professional services. Gregory Hughes, EY MENA IPO leader, highlighted the importance of monitoring the impact of declining interest rates and global elections on regional markets and IPO activity. The IPO market continues to be led by Saudi Arabia and the UAE markets, with Kuwait Boursa welcoming its first listing since 2019.
The second quarter of 2024 saw significant IPO listings, including Dr. Soliman Abdul Kader Fakeeh Hospital Co. in Saudi Arabia, Alef Education Consultancy on Abu Dhabi Securities Exchange, and Spinneys 1961 Holding Plc on the Dubai Financial Market. These listings accounted for a significant portion of the region’s total proceeds for the quarter, reflecting the growing interest in IPOs in the MENA region.
Saudi IPOs led the way in terms of fundraising during the quarter, with companies like Saudi Manpower Solutions Company and Rasan Information Technology Company raising substantial amounts. Boursa Kuwait also saw its first listing in several years, further indicating the positive momentum in the MENA IPO market. Increased liquidity, economic recovery, and positive market sentiment continue to drive IPO activity in the region, with a strong pipeline expected for the second half of 2024.
Eight out of the 14 IPOs listed in the MENA region in the second quarter of 2024 showed positive returns, with companies like Miahona Company achieving significant gains. Stock exchanges across the region exhibited varied performances, with the MSCI Emerging Markets Index and Qatar Exchange general index showing positive gains. Globally, IPO activity declined compared to the previous year, but companies from the GCC region raised a substantial amount in IPOs in 2023, showcasing the region’s potential for future growth.
Fitch Ratings predicts that sales of minority stakes by government-linked entities and the establishment of public subscription funds will further increase the number of IPOs in the MENA region this year. The region’s ongoing efforts towards economic diversification and market reforms are expected to drive IPO activity and contribute to the overall growth and development of the capital markets in the Middle East and North Africa.
