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.
UAE currency: the story behind the money in your pockets
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
Two products to make at home
Toilet cleaner
1 cup baking soda
1 cup castile soap
10-20 drops of lemon essential oil (or another oil of your choice)
Method:
1. Mix the baking soda and castile soap until you get a nice consistency.
2. Add the essential oil to the mix.
Air Freshener
100ml water
5 drops of the essential oil of your choice (note: lavender is a nice one for this)
Method:
1. Add water and oil to spray bottle to store.
2. Shake well before use.
Pox that threatens the Middle East's native species
Camelpox
Caused by a virus related to the one that causes human smallpox, camelpox typically causes fever, swelling of lymph nodes and skin lesions in camels aged over three, but the animal usually recovers after a month or so. Younger animals may develop a more acute form that causes internal lesions and diarrhoea, and is often fatal, especially when secondary infections result. It is found across the Middle East as well as in parts of Asia, Africa, Russia and India.
Falconpox
Falconpox can cause a variety of types of lesions, which can affect, for example, the eyelids, feet and the areas above and below the beak. It is a problem among captive falcons and is one of many types of avian pox or avipox diseases that together affect dozens of bird species across the world. Among the other forms are pigeonpox, turkeypox, starlingpox and canarypox. Avipox viruses are spread by mosquitoes and direct bird-to-bird contact.
Houbarapox
Houbarapox is, like falconpox, one of the many forms of avipox diseases. It exists in various forms, with a type that causes skin lesions being least likely to result in death. Other forms cause more severe lesions, including internal lesions, and are more likely to kill the bird, often because secondary infections develop. This summer the CVRL reported an outbreak of pox in houbaras after rains in spring led to an increase in mosquito numbers.
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
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
