The value of IPO deals in the Gulf jumped 14-fold year-on-year in the first quarter of 2020 as companies eyed listing on Gulf bourses following Saudi Aramco’s record-breaking market debut late last year.
Three IPOs were recorded in the Gulf during the first three months of the year, raising $801.3 million (Dh2.94bn), compared to one listing worth $57.6m in the same quarter a year ago, according to consultancy EY's Mena IPO report.
The value of deals in the Middle East and North Africa reached $814.2m during the first quarter of this year, helped by Egypt's Emerald Real Estate Investments listing that raised $13m in February.
"The year began with strong optimism and promise for the IPO market in the Mena region," Matthew Benson, leader of EY's Mena transaction advisory services, said. "Following the interest in Saudi Aramco’s IPO, there was a marked increase in companies pursuing listings on GCC stock exchanges."
Two of the three GCC listings in the quarter were on Saudi Arabia's exchange, with the largest being the $700.9m listing of Dr Sulaiman Al Habib Medical Services Company, a healthcare group operating hospitals, medical centres and pharmacies.
The number and value of IPO deals declined quarter-on-quarter.
Listings could slow further during the current quarter, though, as the pandemic has hit company earnings and put a dent in the plans of potential issuers. As a result, IPO markets in the Mena region are unlikely to rebound quickly in the second or third quarter of this year, according to Gregory Hughes, leader of EY's Mena IPO business.
"Investor sentiment will continue to be cautious, given significant volatility in the markets and uncertainty regarding future events including Covid-19 impact, oil pricing, and the US elections amongst other things," Mr Hughes said.
The drop in economic growth, disruption in various industries from tourism to manufacturing, decline in oil demand and the drop in oil prices have forced potential issuers to rethink the timing of their debut and delay their offerings, Mr Benson said.
The delay is "a prudent move given the current market scenario", he said. "Potential issuers nevertheless continue to seek new capital, in some cases driven by the current market environment."
For example, the Egyptian capital market was expecting as many as 14 companies to go public in 2020 as a programme to list stakes in state-owned enterprises moves ahead, but the market is seeing delays in listing plans due to the impact of Covid-19 on both local and global stock markets, the consultancy said.
However, several companies in Mena are preparing for offerings after the third quarter of 2020, according to EY.
The pandemic and measures to contain the deadly virus have pushed the global economy into the deepest recession since the Second World War, with per capita output declining in the largest fraction of economies since 1870, the World Bank said this week.
The global economy is expected to shrink 5.2 per cent in 2020, a sharp revision from the 2.5 per cent growth projection the World Bank had made in January. It now expects per capita incomes to decline 3.6 per cent in all regions of the world.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
THE SPECS
Touareg Highline
Engine: 3.0-litre, V6
Transmission: 8-speed automatic
Power: 340hp
Torque: 450Nm
Price: Dh239,312
Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
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India squads
Test squad against Afghanistan: Rahane (c), Dhawan, Vijay, Rahul, Pujara, Karun, Saha, Ashwin, Jadeja, Kuldeep, Umesh, Shami, Pandya, Ishant, Thakur.
T20 squad against Ireland and England: Kohli (c), Dhawan, Rohit, Rahul, Raina, Pandey, Dhoni, Karthik, Chahal, Kuldeep, Sundar, Bhuvneshwar, Bumrah, Pandya, Kaul, Umesh.
ODI squad against England: Kohli (c), Dhawan, Rohit, Rahul, Shreyas, Rayudu, Dhoni, Karthik, Chahal, Kuldeep, Sundar, Bhuvneshwar, Bumrah, Pandya, Kaul, Umesh
BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Du Football Champions
The fourth season of du Football Champions was launched at Gitex on Wednesday alongside the Middle East’s first sports-tech scouting platform.“du Talents”, which enables aspiring footballers to upload their profiles and highlights reels and communicate directly with coaches, is designed to extend the reach of the programme, which has already attracted more than 21,500 players in its first three years.
