- Q1 saw a jump of 1,242% in proceeds and 400% in volume when compared to Q1 2021
- Saudi Arabia’s Tadawul dominates IPO activity while seven firms float on the Nomu Parallel market
- Abu Dhabi Ports Company in the UAE raised $1.1 billion through private placement ahead of listing on the ADX
According to the EY MENA IPO Eye Q1 2022 report, the MENA region saw a 400% year-on-year increase in the number of companies listing with 15 IPOs raising proceeds of US$4 billion - an increase of 1,242% in value when compared to the same period in 2021.
The figure of 15 listings compares to three IPOs in Q1 2021, showing that activity in MENA looks very promising with a strong start to the year, despite uncertainties that are affecting the global IPO outlook. In contrast, global IPO volumes during Q1 2022 fell 37%, with proceeds down by 51% year-on-year. Strong IPO pipelines in the Kingdom of Saudi Arabia and the United Arab Emirates are expected to result in another record-setting year for MENA IPO markets.
Saudi Arabia dominated listings activity in Q1 2022 with 6 IPOs on Tadawul’s Main Market and 7 IPOs on the Nomu-Parallel Market, for a total of 13 IPOs raising US$ 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 US$801 million, while Q1 2021 also saw three listings, with a combined value of US$295 million. In 2022, there were 14 total listings across the GCC during Q1, which raised approximately US3.9 billion in proceeds.
Brad Watson, EY MENA Strategy and Transactions Leader, says:
“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.”
Saudi Arabia dominates in volume and value
Saudi Arabia dominated IPO activity, with six IPOs on Tadawul’s Main Market and seven IPOs on NOMU, marking a total of 13 IPOs raising US$3.9 billion in proceeds. Jahez International Company for Information System Technology completed its listing on the Tadawul and was the first listing in the MENA region for 2022, after raising US$427 million with their IPO on Nomu-Parallel Market in December 2021.
The largest IPO during Q1 2022 for the MENA region was in Saudi Arabia, with Al Nahdi Medical Co. raising US$1.38 billion in the Kingdom’s biggest IPO since Saudi Aramco’s listing in 2019. Saudi Arabia's digital security firm Elm Information Security Company had the second-biggest IPO of the quarter, raising US$819 million in proceeds.
The Nomu-Parallel Market also saw four direct listings during this period with no funds raised through a public offering but with shares admitted to trading. They were AME Company for Medical Supplies, Obeikan Glass Co, Saudi Parts Center Company and Saudi Azm for Communication and Information Technology Co. The Tadawul All Share Index (TASI) increased by 16.1% in Q1 compared to the same quarter in 2021.
Abu Dhabi lists ports company, MENA equity markets continue strong performance
In the United Arab Emirates, Abu Dhabi’s main index saw an increase of 17.2% during Q1 2022. Separately, the Abu Dhabi Ports Company raising capital of US$1.1 billion through a private placement before listing on the ADX.
MENA equity markets continued their strong performance during 2021 into 2022. The Bahrain Bourse increased by 15.3% in Q1 2022, reflecting a strong return to trading and a fast-growing investor appetite in the Kingdom. This growth was mirrored in Kuwait, where the Boursa Kuwait Premier Market Index increased by a significant 18% in Q1.
Oman also saw a welcome return to IPO activity in Q1 2022, with the Barka Desalination Co SAOC raising US$11.4 million and completing its listing on the Muscat Stock Exchange (MSX). Overall, the MSX saw a slight increase of 1.8% during Q1 2022. Elsewhere in the GCC, the Qatar Exchange General Index in Doha saw a strong increase of 16.5% during the first quarter of 2022.
Further afield, the Egyptian Exchange (EGX) saw the listing of the previously postponed IPO of cosmeceuticals giant Macro Group Pharmaceuticals, having raised US$82.7 million during their IPO. The Nahr Al-Khair Company for Investment and Agricultural Development also completed its direct listing during Q1 2022.
Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, says:
“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. Within the GCC, Saudi Arabia in particular is presenting investors with a great variety of opportunities across multiple industry sectors that bodes well for Saudi Arabia’s Vision 2030 for the development of a diverse non-oil economy. As we look ahead, Q2 is already off to a strong start with the DEWA IPO listing on the Dubai Financial Market, which was heavily oversubscribed. This good news is particularly welcome given the current context of global uncertainty, which led to a number of launches in other markets being postponed.”
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. In the first quarter, global demand declined slightly by 0.3% from the previous quarter. OPEC and other oil producers outside North America increased their production, while US output marginally declined. 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.
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