https://arab.news/wsdbp
RIYADH: Initial public offerings across the Gulf Cooperation Council region registered a year-on-year increase in proceeds in the third quarter of 2024 despite a decline in the number of listings, according to a new report.
The energy sector spearheaded this quarter’s growth, led by NMDC Energy’s listing, which raised $877 million — the largest IPO in the UAE this year, stated PwC Middle East.
Saudi Arabia’s parallel market, Nomu, also contributed to the quarter’s performance with three listings.
PwC forecasts strong aftermarket performance for companies completing IPOs in 2024, predicting that most of the top 10 IPOs by deal size will trade above their initial offering prices.
This outlook suggests a favorable market reception for large IPOs in the coming year, with strong investor demand potentially driving post-IPO stock prices higher.
“As has been the case in recent years, Q3 has seen relatively few companies come to market. Since the end of the quarter, we have seen a number of IPOs either completed or announced across the GCC, including OQ Exploration and Production, Oman’s largest ever IPO, supporting the positive outlook for the remainder of 2024,” said Muhammad Hassan, capital markets leader at PwC Middle East.
In the third quarter, bond issuances in the GCC raised $4.4 billion, marking an almost 30 percent increase over the previous year.
Additionally, $5.2 billion was raised through sukuk issuances, with 88 percent of these bonds listed on the Qatar Stock Exchange or Nasdaq Dubai.
Governments in the region accounted for nearly 65 percent of total bond and sukuk issuances.
“Looking forward, the outlook for the GCC IPO market remains positive with a healthy IPO pipeline of companies from a diverse range of sectors busy preparing for their upcoming IPOs across the region,” the report stated.
According to another report by the Kuwait Financial Center, also known as Markaz, Saudi Arabia and the UAE led IPO activity in the GCC with $1.7 billion raised in the third quarter, a 6 percent increase from the year before.
The analysis highlighted that the UAE dominated the quarter’s activity, leading the region with $1.1 billion in IPO proceeds from a single listing, accounting for 69 percent of the total raised across the GCC.
Saudi Arabia followed with $512 million from its IPOs in the third quarter, contributing 31 percent to the regional total.
In the Kingdom, the food and beverage sector saw wheat milling company Arabian Mills for Food Products raise $271 million, accounting for 16 percent of the quarter’s proceeds.
Meanwhile, perfume maker Al Majed for Oud, a key player in the consumer cyclical sector, raised $188 million, contributing 11 percent.
The materials sector had a smaller presence, with ASG Plastic Factory Co. raising $8.8 million on Tadawul’s parallel Nomu market.
The commercial and professional services sector witnessed three IPOs, including First Avenue Real Estate Development Co., Altharwah Albashariyyah Co., and Al Ashghal Al Moysra Co., which collectively raised $44.4 million.