The GCC could be headed for another bumper year for initial public offerings in 2024, thanks to governments in the region pushing for privatisation, the growing appetite of private sector companies to raise capital and strong investor demand, according to companies and analysts.
Stellar post-listing performance of regional companies – returning an average of 40 per cent to investors – has increased the popularity of IPOs, leading to a rise in the pipeline for new public floats.
“Past trends of strong [investor] interest and post-listing market performance with a clear positioning of growth prospects, should encourage IPO candidates to enter the primary market with confidence,” said Thomas Mathew, vice president of investment strategy and research at investment strategy and research company Kamco.
Companies from the GCC region raised a total of $10.79 billion in IPOs last year, data showed.
Although the overall value of funds raised through primary public listings dropped by about 55 per cent annually, the number of IPOs in the GCC declined marginally to 46 issuances in 2023 from 48 issuances in 2022, according to data from Bloomberg and stock exchanges.
The volume of issuances across the GCC last year was driven by smaller ticket listings resulting in lower proceeds.
However, the positive performance of the majority of these stocks is expected to encourage more firms to list.
Dividend yields from recurring revenue-generating companies, mostly state-owned enterprises, were highly sought after, pushing demand for their share offerings.
Analysts say companies with IPO plans and the investment bankers they have hired will pitch the issuances to potential investors on price appreciation prospects.
A 5 to 6 per cent dividend yield, according to the trends of the past two years, will be another selling point.
UAE and Saudi Arabia lead the ranks
The UAE, the Arab world's second-largest economy, topped in terms of the funds raised last year in the GCC through IPOs. Issuers secured $6.07 billion from eight listings on UAE exchanges, accounting for about 56.3 per cent of total proceeds, according to data from Kamco.
The Abu Dhabi Securities Exchange was the top regional bourse with $4.9 billion, followed by the Dubai Financial Market with $500 million.
Companies raised $3.5 billion on the Saudi Exchange (Tadawul) with 35 offerings, recording the highest number of IPOs in the GCC during 2023 and 35 per cent of total proceeds.
The Muscat Securities Market listed two IPOs with total proceeds of $973 million, while one listing on the Qatar Exchange raised $193 million.
Despite a drop in both value and volume, the broader Middle East region along with China were the bright spots in the global IPO market, according to PwC’s Global IPO Watch 2023 and outlook for 2024 report.
China was the largest IPO market globally, with companies raising $45.3 billion in deals that included three of the world’s top 10 listings last year.
Equity market performance in 2023 remained strong in most markets. The MSCI World index climbed more than 22 per cent, supported by a 24 per cent rise in the S&P 500, a 4 per cent jump in the FTSE100 and a 12 per cent advance of Stoxx Europe 600.
PwC remains cautiously optimistic about the IPO momentum globally as the macroeconomic landscape stabilises this year.
“The renewed optimism is tempered by geopolitical uncertainties and with elections in 2024 for a significant proportion of the world's population, IPO windows will rapidly open and close,” said Stuart Newman, global IPO centre leader at PwC.
The Middle East and North Africa region also has a healthy pipeline of IPOs this year, according to EY.
“IPOs [in Mena] remain driven by the dominant economies of Saudi Arabia and the UAE, which are pursuing their strategic agenda of increasing capital market activity on the local exchanges and stepping up efforts to attract foreign investment,” said Brad Watson, EY Mena strategy and transactions leader.
Increasing visibility
Companies also view IPOs as an attractive option given the current interest rate environment, according to analysts.
Abu Dhabi-based blockchain and crypto solutions company Phoenix Group, which began trading on the Abu Dhabi Securities Exchange in December following a $370 million IPO, said fund-raising through a share sale is a viable option for companies looking to finance expansion.
The IPO deal of Phoenix, which offers services including cloud mining, data centre hosting and crypto trading, was 33 times oversubscribed.
“Phoenix group is in the next phase of growth and needed capital to fuel its expansion, hence the decision to go public and list on ADX,” said an official for the company.
“The benefits of going public are abundant, including increased capital, visibility, and the ability to attract top talent,” said Sam Barnett, chief executive of MBC Group.
“However, it also comes with the challenge of meeting regulatory requirements and managing public expectations, which we are prepared to navigate.”
In December, the MBC Group raised 831 million riyals ($221.6 million) through the sale of a 10 per cent stake in a public offering on the Tadawul.
“The IPO is our strategy to amplify our market position, broaden our audience reach and bolster investments in our flagship streaming platform, Shahid, as well as other promising entertainment verticals,” he said.
Pharmaceutical company Avalon Pharma, which plans to raise $131 million through an upcoming Tadawul listing, is selling 6 million shares or 30 per cent of its capital to investors.
The IPO is the “next step in the maturity of our company and something we have been considering for the past few years”, chief executive Mohamed Al Ghannam told The National.
“Through the listing of the shares, we increase visibility and … in the long term, we can access potential sources of funding if needed.”
Avalon Pharma, which produces and promotes consumer health, beauty brands and generic drugs, aims to launch new products and expand its regional footprint, he added.
“We have a clear growth strategy not only till 2027 … but until 2030 as well.”
The company, which recorded 338 million riyals in revenue last year, seeks to double that amount by 2027 and reach 1 billion riyals in revenue by 2030.
GCC companies will continue to list their shares in the coming months amid significant reforms on the back of “favourable market dynamics which provide the opportunity and the appetite for founders of these companies to list their business or their companies and sell the stake”, Mr Al Ghannam said.
While government initiatives such as the Saudi Vision 2030 and the privatisation of state-owned assets in the UAE led the initial phase of IPOs in the GCC, the next phase is being driven by family-owned businesses, according to PwC.
The significant premium at which most shares traded from their IPO prices last year will prove to be a momentum builder for companies and investment banks to push for more deals, analysts said.
Most GCC public floats recorded strong trading momentum post-listing, with Ades Holding and ADX-listed Pure Health both rising more than 70 per cent on debut, according to PwC.
While shares of Adnoc Logistics and Services surged 58 per cent on the listing, Dubai Taxi, Adnoc Gas and Phoenix rose 19 per cent and 18 per cent each.
Most of these shares continue to trade above their listing prices.
While Ades Holding closed at 19.22 Saudi riyals, about 42 per cent higher than its listing price on Monday, Pure Health shares were up 45.7 per cent from its listing price of Dh3.26. As Adnoc L&S closed 97 per cent above its IPO price, Dubai Taxi and Adnoc Gas closed 27 per cent 34 per cent higher, respectively, from their listing prices.
“The competitive position of IPOs as an investment option and dividend yield expectations will be key drivers”, in attracting new investors, Kamco’s Mr Mathew said.
While Saudi Arabia and the UAE are likely to keep the lead position for IPOs this year, Oman is expected to emerge as a significant player with the potential listing of many state-owned assets.
Oman’s sovereign wealth fund, the Oman Investment Authority, is set to launch about 30 IPOs, according to Thuraiya Al Balushi, the wealth fund’s manager for economic diversification.
“OIA aims to enhance private-sector participation to deepen the capital market, paving the way for an upgrade by MSCI from frontier to emerging-market status,” Ms Al Balushi told Bloomberg in December.
Oman's OQ Gas Network IPO was the fourth largest public float in the region last year, raising $771 million. Abraj Energy Services also raised $244.1 million through its listing.
“A repeat of 2023 is possible,” Mr Matthew said.
However, “we also believe that … [the market] will be dominated by a fewer number of larger issues,” which will grow the value of deals significantly, he added.
Despite strong investor demand, analysts do not see a repeat of the 2022 boom that was led by big-ticket IPOs such as the $6.1 billion issuance of Dubai Electricity and Water Authority or the $1.3 billion IPO of Saudi Aramco Base Oil Company Luberef.
Factors such as interest rates, geopolitics, stock market volatility and oil prices will continue to remain crucial in 2024 for the pipeline of 28 to 30 companies that have announced listing plans or are rumoured to seek a listing, according to Kamco.
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Where to apply
Applicants should send their completed applications - CV, covering letter, sample(s) of your work, letter of recommendation - to Nick March, Assistant Editor in Chief at The National and UAE programme administrator for the Rosalynn Carter Fellowships for Mental Health Journalism, by 5pm on April 30, 2020.
Please send applications to nmarch@thenational.ae and please mark the subject line as “Rosalynn Carter Fellowship for Mental Health Journalism (UAE programme application)”.
The local advisory board will consider all applications and will interview a short list of candidates in Abu Dhabi in June 2020. Successful candidates will be informed before July 30, 2020.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Killing of Qassem Suleimani
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Museum of the Future in numbers
- 78 metres is the height of the museum
- 30,000 square metres is its total area
- 17,000 square metres is the length of the stainless steel facade
- 14 kilometres is the length of LED lights used on the facade
- 1,024 individual pieces make up the exterior
- 7 floors in all, with one for administrative offices
- 2,400 diagonally intersecting steel members frame the torus shape
- 100 species of trees and plants dot the gardens
- Dh145 is the price of a ticket
Killing of Qassem Suleimani
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
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The years Ramadan fell in May
The years Ramadan fell in May
Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
More on animal trafficking
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More on Quran memorisation:
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Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
Brief scores:
Arsenal 4
Xhaka 25', Lacazette 55', Ramsey 79', Aubameyang 83'
Fulham 1
Kamara 69'
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Mohammed bin Zayed Majlis
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
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Amith's selections:
5pm: AF Sail
5.30pm: Dahawi
6pm: Taajer
6.30pm: Pharitz Oubai
7pm: Winked
7.30pm: Shahm
8pm: Raniah
UAE currency: the story behind the money in your pockets
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
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Zayed Sustainability Prize
RACE CARD
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8.50pm Rated Conditions (TB) Dh 120,000 (D) 1,600m
9.25pm Handicap (TB) Dh 95,000 (D) 1,200m
10pm Handicap (TB) Dh 85,000 (D) 2,000m
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BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
The five pillars of Islam
APPLE IPAD MINI (A17 PRO)
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In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
