The Middle East and North Africa (MENA) region saw a continued surge in Initial Public Offerings (IPOs) during the second quarter of 2024, with 14 IPOs raising $2.64bn in proceeds, according to the EY MENA IPO Eye Q2 2024 report.
This represents an increase from the 13 listings in Q2 2023, with proceeds growing by 45.3% compared to the same period last year.
The Kingdom of Saudi Arabia (KSA) led the region’s IPO activity in Q2 2024, accounting for 11 out of the 14 listings and raising a total of $1.6bn. The highest proceeds came from Dr. Soliman Abdul Kader Fakeeh Hospital Co. at $764m, followed by Saudi Manpower Solutions Company (SMASCO) at $240m and Rasan Information Technology Company at $224m.
The United Arab Emirates (UAE) was also a significant contributor to the region’s IPO market, with Alef Education Consultancy LLC raising $515m on the Abu Dhabi Securities Exchange (ADX) and Spinneys 1961 Holding Plc raising $375m on the Dubai Financial Market (DFM). These two IPOs accounted for 33.8% of the quarter’s total proceeds.
“While the MENA equity markets continue to face challenges, Q2 2024 was a stronger quarter with a total of 14 IPOs raising $2.6bn,” said Brad Watson, EY MENA Strategy and Transactions Leader. “Eleven of the companies listed were in the KSA region (five of which were on the Tadawul main market). The most significant fundraising was by Dr. Soliman Abdul Kader Fakeeh Hospital Co. ($764m).”
“Increased liquidity driven by higher oil prices, economic recovery, and positive market sentiment has kept the IPO activity in the region buoyant with a strong pipeline for H2 2024,” Watson added.
Eight out of the 14 MENA IPOs listed in Q2 2024 had shown a positive return as of the 30 June 2024 share price in comparison with their IPO price, with Miahona Company achieving the highest gain of 90.4% within the period.
Kuwait also saw its first listing since Q4 2019, with Beyout Investment Group (BIG) Holding Co. raising $147m on the Kuwait Stock Exchange (KSE).
The remainder of 2024 is set to see robust activity in the IPO market, with an additional 16 private companies and seven funds across various sectors intending to list on the MENA exchanges. Of the companies intending to be listed, 14 are in KSA, including Riyad Capital LLC, United International Holding Co. and Arabian Mills for Food Products, among others. One company in the UAE has also obtained approval to list, alongside Go Bus in Egypt.
“The MENA IPO market continued to be led by the KSA and the UAE markets,” said Gregory Hughes, EY MENA IPO Leader. “However, the Kuwait Boursa welcomed its first listing since 2019. There is a continued focus on economic diversification away from oil and gas, with the MENA region continuing to see listings from a variety of sectors including health care, education, consumer goods and professional services. As we enter a phase of declining interest rates and continue to witness major country elections around the world, we will monitor with interest the subsequent impact on regional markets and IPO activity.”
Globally, IPO activity declined compared to Q2 2023, with the number of IPOs dropping by 15% from 317 to 271, and proceeds decreasing by 31% from $40.4bn to $27.8bn. However, the EMEIA region experienced a notable comeback, with inflation approaching “normal” levels, interest rates falling, stock markets rallying to hit all-time highs, and volatility remaining low. This resurgence saw the region regain the top global IPO market share by number – 45% of deal volume and 46% of value – for the first time in 16 years.
