Press release

7 Mar 2022 Dubai, AE

Historic Year for MENA markets, with 21 IPOs raising US$7.9 billion in 2021

Dubai, 7 March 2022: According to the EY MENA IPO Eye Q4 2021 report, the MENA region saw 21 IPOs raise proceeds of US$7.9 billion in 2021, an increase of 133% in total issuances and 325% in total proceeds when compared to 2020.

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  • Fourth quarter saw major activity, with thirteen issuances amounting to US$5.6 billion in proceeds
  • Strong pipeline for 2022 MENA IPO activity - several companies announce listing plans

According to the EY MENA IPO Eye Q4 2021 report, the MENA region saw 21 IPOs raise proceeds of US$7.9 billion in 2021, an increase of 133% in total issuances and 325% in total proceeds when compared to 2020.

The year’s biggest IPOs in value in MENA were in the utilities, energy and financial services sectors, with Saudi Arabia’s International Company for Water and Power Projects (ACWA Power Company) leading with proceeds of US$1,211.4 million on the Tadawul. The Tadawul main market saw five IPOs in Q4 alone, with a further two on the Nomu-Parallel Market. The region’s second largest IPO in value in 2021 was in the energy sector, with the ADNOC Drilling Company securing proceeds of US$1.1 billion in Q4 on the Abu Dhabi Securities Exchange (ADX).

Major market activity returned to the MENA region, with thirteen issuances raising US$5.6 billion in proceeds for the year. Globally, 2021 was the most active year for the IPO market for over 20 years, with a total of 2,388 deals raising US$453.3 billion in proceeds - a 64% and 67% respective increase Y-O-Y. Europe, the Middle East, and Africa exchanges produced the highest growth seeing a 158% increase in the number of IPOs (724) and a 214% increase by proceeds (US$109.4b).

Brad Watson, EY MENA Strategy and Transactions Leader, says:

“MENA IPOs had a record year in 2021, with an unprecedented surge in issuances, which was driven by a combination of supportive regional regulatory actions as well as a shift in investor sentiment back towards MENA markets. IPO activity was particularly encouraging during the fourth quarter when Saudi Arabia’s ACWA POWER became the region’s largest IPO in the year, followed closely by the listing of ADNOC Drilling Company.”

Strong index returns across MENA equity markets

MENA equity markets had a stellar performance during 2021, with the observed markets all generating double-digit returns. The top performer for 2021 in the MENA equity markets was Abu Dhabi, with a return of 68%, followed by the Tadawul, with its index up by 30% for the year. The Dubai Financial Market was up by 28%, followed by the Boursa Kuwait Premier Market Index, which grew by 26.2%. The Bahrain All Share Index increased by 21%, while in Oman, the MSX 30 Index returned 13%. The index performance in Qatar reached 11%, and in Egypt, the EGX 30 Index was up by 10%.

Qatar approves 2022 budget

The Qatar index performed well, increasing by 11% in 2021. In November 2021, the exchange launched its first ESG tradable index, in cooperation with MSCI, to track securities with the best ESG profiles. Additionally, Qatar approved its budget for the 2022 fiscal year in Q4 of 2021, with a budget expected to amount to US$53.8 billion - a 22.4 percent rise compared to last year’s budget estimates.

Record SPAC IPOs completed in 2021

Global SPAC IPOs also reached unprecedented levels during the year, peaking in Q1 2021. However, activity contracted dramatically in Q2 2021 due to heightened regulatory scrutiny. While SPAC IPO activity is not expected to return to the level witnessed in Q1 2021, SPAC IPOs will continue to play an important role as a viable alternative for companies wanting to access capital markets without following the traditional IPO route.

Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, says:

“While the extent to which the MENA region’s capital markets have rebounded is to be welcomed, the mid-to-long-term outlook remains somewhat uncertain, particularly in the context of rising interest rates, high inflation and global geopolitical tensions. However, when we consider that a great number of state-owned entities have announced their listing plans, and recent MENA listings have been so heavily oversubscribed, we are quite clearly moving through a period of high demand and strong investor sentiment. Key question remains as to whether there is sufficient liquidity in the regional markets to cover the expected pipeline of large government backed IPOs in the near term.”

He continued, 

“Given the mixed picture, MENA IPO candidates must focus on careful preparation to ensure they are able to tap available IPO windows whilst continuing to carefully assess the environment to ensure they can adapt to quickly changing regulations, fast-moving market dynamics, and the regulatory shift towards ESG reporting.”

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