15 Mena IPOs raise $4bn in first quarter

The Mena region saw a 400 per cent year-on-year increase in the number of companies listing with 15 IPOs raising proceeds of $4 billion during Q1-2022, an increase of 1,242 per cent in value when compared to the same period in 2021, according to a report by EY.

The figure of 15 listings compares to three IPOs in Q1 2021, showing that activity in Mena looks very promising with a strong start to the year, despite uncertainties that are affecting the global IPO outlook, as per the EY MENA IPO Eye Q1 2022 report.

In contrast, global IPO volumes during Q1 2022 fell 37pc, with proceeds down by 51pc year-on-year. Strong IPO pipelines in Saudi Arabia and the United Arab Emirates are expected to result in another record-setting year for Mena IPO markets.

Saudi Arabia dominated listings activity in Q1 2022 with 6 IPOs on Tadawul’s Main Market and 7 IPOs on the Nomu-Parallel Market, for a total of 13 IPOs raising $3.9 billion in proceeds.

The NOMU market offers lighter listing requirements, serving as an alternative platform for companies to go public, with investments restricted to qualified investors.

Within the GCC, the number of listings and their total value far exceeded that of previous years. In Q1 2020 the market saw only three listings with a combined value of $801m, while Q1 2021 also saw three listings, with a combined value of $295m.

In 2022, there were 14 total listings across the GCC during Q1, which raised approximately $3.9bn in proceeds.

EY MENA strategy and transactions leader Brad Watson said: “It is clear that with an unprecedented surge in issuances in Q1 2022, Mena IPO activity is delivering new opportunities for investors and bucking the global trend. The breadth of industry sectors that have been listed also reflects a more widespread return to strong economic growth across the region, with IPOs in consumer cyclicals, technology, basic materials, healthcare and the energy sector. Saudi Arabia is currently the dominant player, but with regionwide activity that is bucking the global trend, we anticipate continued IPO activity across the entire region as 2022 progresses.”

It dominated IPO activity, with six IPOs on Tadawul’s Main Market and seven IPOs on NOMU, marking a total of 13 IPOs raising $3.9bn in proceeds.

The largest IPO during Q1 2022 for the region was also in Saudi Arabia, with Al Nahdi Medical raising $1.38bn in the country’s biggest IPO since Saudi Aramco’s listing in 2019.

Meanwhile, regional equity markets continued their strong performance during 2021 into 2022.

The Bahrain Bourse increased by 15.3pc in Q1 2022, reflecting a strong return to trading and a fast-growing investor appetite in the kingdom.

Commenting on regional prospects, Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, said: “With such a strong start to IPOs and trading activity across many of the Middle East’s exchanges in Q1 2022, we can be confident that the region is moving through a period of strong investor confidence.

The EY analysis suggests that after two years of oil and gas market reaction to a continuous string of historic events, the first quarter of 2022 faces the prospect of a complete reworking of the global supply-demand balance, trade flows and capital allocation.

Analysis shows that the oil market balance continues to lean toward undersupply. Going forward, supply concerns will almost certainly become the dominant narrative, with refiners and traders rethinking the flow of crude oil and refined products against the race to bring alternatives to the energy landscape, presenting implications for capital markets.”


Source: https://www.gdnonline.com/Details/1093263/15-Mena-IPOs-raise-$4bn-in-first-quarter


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