A multitude of catalysts, including robust growth, economic diversification plans and strong investor demand for initial public offerings in the Gulf region is set to continue driving new listings in 2025 and beyond.
The quality of the companies being listed, as well as ample liquidity in markets that has supported the IPO rush over the past three years, will continue to fuel the listing activity next year, analysts say.
The pipeline of potential issuers includes companies from sectors including technology, consumer services, transportation, logistics, and health care.
“Multiple factors have fuelled the regional IPO momentum. Improving secondary market liquidity, increasing FII inflows, higher weights in international indices, improving disclosures and investor friendly regulatory changes are acting as a catalyst for primary market offerings,” says Nishit Lakhotia, head of research at SICO Bank, Bahrain.
“In addition, factors such as divestment priorities of government, incentives and push by regulators for companies to list, ability to fetch reasonable valuations for selling shareholders [are also supporting the market].”
The Gulf countries are rapidly diversifying their economies away from oil with a focus on non-oil sectors such as tourism and technology, as well as financial services.
Opening the regional stock markets to foreign qualified institutional investors has also been a central plank of the broader economic transformation agenda.
“Investors, both regional and global, are also drawn to the GCC markets because of their resilience and strong performance in comparison to volatile markets elsewhere,” says Tony Hallside, chief executive, STP Partners, a prime brokerage firm based in DIFC.
“Furthermore, the limited pool of high-quality companies in other regions has driven global investor attention towards the Gulf, where returns have been impressive.”
The regional markets bucked the global trend where IPO activity remained muted amid a global economic slowdown, market volatility and geopolitical shifts.
In the third quarter, volumes fell by 14 per cent annually to 310 IPOs and proceeds by 35 per cent to $24.9 billion, according to an EY report.
“Even as volatility fuelled a downturn in other regions, the GCC has seen robust growth and in fact, the global financial volatility which resulted in a drop in IPO activity outside the region has helped GCC companies sell equity at high valuations,” Neetika Gupta, head of research at Ubhar Capital, Oman, tells The National.
“This resilience was largely due to the confidence shown by regional issuers in the business fundamentals of their companies and their effective communication with the market, which helped to generate a high level of investor appetite.”
Privatisation and market expansion drive
The push for privatisation in the Gulf and the push to expand the size and scope of the regional capital markets have also propelled new issuances over the past few years.
Analysts say the IPO landscape in the Gulf is evolving beyond its traditional focus on energy and finance, with Talabat being a notable example of this shift.
Last month, Talabat Holding, the Middle Eastern unit of Germany's food delivery platform Delivery Hero, raised Dh7.5 billion ($2.04 billion) through its IPO, setting the price at the top of the range for the biggest public float in the Gulf this year. The offering attracted a double-digit oversubscription level.
Talabat's IPO followed Lulu Group's debut on the Abu Dhabi Securities Exchange in November, after the retailer raised Dh6.32 billion from its offering.
UAE stock markets alone hit $1 trillion in market capitalisation last month, primarily driven by IPOs as well as strong earnings, according to data compiled by Bloomberg.
The combined market capitalisation of the UAE's two stock exchanges – ADX and Dubai Financial Market – exceeded that of Milan or Madrid in November, driven in part by new listings in the past few years.
In total, there have been 27 major IPOs in the UAE since January 2021 – 18 on the ADX, and nine on the DFM.
The Dubai Water and Electricity Authority (Dewa) tops the list in terms of value, having raised $6.07 billion in 2022, followed by Adnoc Gas with $2.47 billion in 2023, Talabat Holding this year, and Borouge, which raised $2 billion in 2022.
Adding to the diversity were IPOs from a wide range of sectors, including food and beverage, retail, gas, ports, logistics, education, transportation, health care, chemicals, utilities, and tech, apart from energy, according to Bloomberg data.
Similarly, in Saudi Arabia, the IPO market has seen a shift in focus towards non-oil industries, adding to market depth and leading to a more diversified and resilient market environment.
Going forward, analysts anticipate a greater presence from emerging sectors such as FinTech, electric vehicles, telecom, e-commerce, and financial services, in line with global trends and the region’s push for innovation.
“Airlines is one sector that should have more listings given robust expansion plans, recent strong performance and a somewhat natural hedge to oil weakness as they benefit on cost front. Also we should see more offering in sectors such as logistics, utilities, commodities, technology and financial services, including FinTech,” says Mr Lakhotia.
Market performance
Most of the stocks that went public in the past three years across the region are currently outperforming other volatile markets in terms of post-listing gains.
In the UAE, for example, of the 27 stocks that debuted on the equity markets from January 2021, 17 or 63 per cent are trading above their offer prices (as on December 17), according to data from Bloomberg.
In Saudi Arabia too, the IPO scorecard of floated companies has been stellar over the past few years. Out of more than 40 major companies that went public since January 2021, only nine of the stocks are trading below their offer price as of December 17, Bloomberg data show.
“The GCC's proactive reforms in capital markets and regulations have also played a crucial role in fostering a favourable environment for IPOs. These elements combined explain why the region's IPOs are not just frequent but also performing better in terms of investor confidence and subscription rates,” says Mr Hallside.
Emergence of smaller markets
The influx of new listings in the past two years is not limited to Saudi Arabia and the UAE. Oman’s stock market, for instance – the smallest among the Gulf in terms of market cap – saw a couple of floats in the primary market amid a reform push that is now under way.
Shares of OQ Base Industries, the sultanate’s only integrated producer of methanol, ammonia, and LPG products, started trading this month following an IPO that raised about 188 million Omani rials ($489 million).
In October, OQ Exploration and Production (OQEP), also a subsidiary of Oman’s state-run energy company OQ, raised 780 million rials through its IPO, making it the sultanate's biggest offering. OQ’s pipeline business – OQ Gas Networks – also listed in October last year, raising 288 million rials.
“The Oman government has been following suit with other regional players to enhance the depth and liquidity of its market with key government IPOs,” Ali Khalpey, managing director and head – equity capital markets, EFG Hermes, Dubai, tells The National.
“We see this as a positive driver for the region’s capital markets and a successful outcome for the governments that kick-started these markets with the government backed IPOs.”
The sultanate is aiming to privatise more than 30 government-owned firms between 2021 and 2025.
Looking ahead, the outlook for the IPO market in the Gulf is promising with a robust pipeline of companies from various sectors preparing to float on the markets, analysts say.
“The IPO pipeline should be well supported by the region’s efforts to invest heavily in infrastructure, promote economic diversification and open up to foreign investment, especially as the GCC’s largest markets make regulatory changes to meet international standards and incentivise private companies to list on regional stock exchanges,” says Ms Gupta.
Read more about the coronavirus
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Killing of Qassem Suleimani
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In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
The five pillars of Islam
The years Ramadan fell in May
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Mohammed bin Zayed Majlis
Zayed Sustainability Prize
Monster
Directed by: Anthony Mandler
Starring: Kelvin Harrison Jr., John David Washington
3/5
RACE CARD
6.30pm: Al Maktoum Challenge Round-3 – Group 1 (PA) $65,000 (Dirt) 2,000m
7.05pm: Handicap (TB) $65,000 (Turf) 1,800m
7.40pm: Meydan Classic – Listed (TB) $88,000 (T) 1,600m
8.15pm: Nad Al Sheba Trophy – Group 3 (TB) $195,000 (T) 2,810m
8.50pm: Dubai Millennium Stakes – Group 3 (TB) $130,000 (T) 2,000m
9.25pm: Meydan Challenge – Listed Handicap (TB) $88,000 (T) 1,400m
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
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Zayed Sustainability Prize
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
Analysis
Maros Sefcovic is juggling multiple international trade agreement files, but his message was clear when he spoke to The National on Wednesday.
The EU-UAE bilateral trade deal will be finalised soon, he said. It is in everyone’s interests to do so. Both sides want to move quickly and are in alignment. He said the UAE is a very important partner for the EU. It’s full speed ahead - and with some lofty ambitions - on the road to a free trade agreement.
We also talked about US-EU tariffs. He answered that both sides need to talk more and more often, but he is prepared to defend Europe's position and said diplomacy should be a guiding principle through the current moment.
Mohammed bin Zayed Majlis
FIXTURES (all times UAE)
Sunday
Brescia v Lazio (3.30pm)
SPAL v Verona (6pm)
Genoa v Sassuolo (9pm)
AS Roma v Torino (11.45pm)
Monday
Bologna v Fiorentina (3.30pm)
AC Milan v Sampdoria (6pm)
Juventus v Cagliari (6pm)
Atalanta v Parma (6pm)
Lecce v Udinese (9pm)
Napoli v Inter Milan (11.45pm)
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The specs
Price, base / as tested Dh135,000
Engine 1.6L turbo
Gearbox Six speed automatic with manual and sports mode
Power 165hp @ 6,000rpm
Torque 240Nm @ 1,400rpm 0-100kph: 9.2 seconds
Top speed 420 kph (governed)
Fuel economy, combined 35.2L / 100km (est)
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
More on Quran memorisation:
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UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
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
The specs: 2018 Range Rover Velar R-Dynamic HSE
Price, base / as tested: Dh263,235 / Dh420,000
Engine: 3.0-litre supercharged V6
Power 375hp @ 6,500rpm
Torque: 450Nm @ 3,500rpm
Transmission: Eight-speed automatic
Fuel consumption, combined: 9.4L / 100kms
UAE currency: the story behind the money in your pockets
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%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EElggo%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20August%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Luma%20Makari%20and%20Mirna%20Mneimneh%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Education%20technology%20%2F%20health%20technology%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%20Four%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3C%2Fp%3E%0A
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
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If you go:
The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes
The tours: The Tour for Muggles usually runs several times a day, lasts about two-and-a-half hours and costs £14 (Dh67)
Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free
The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).
