UAE and Saudi Arabia spur surge in Mena share sales

The Middle East and North Africa (Mena) region’s capital markets kicked off 2025 with a strong performance, recording 14 initial public offerings (IPOs) that raised $2.4 billion in Q1, a 106 per cent increase in proceeds compared to Q1 2024.  

According to the EY Mena IPO Eye Q1 2025 report, the region’s IPO activity reflects resilience and diversification, with the UAE and Saudi Arabia leading the charge.

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The outlook for the rest of 2025 remains optimistic, with 21 companies, including 17 approved by Saudi Arabia’s Capital Market Authority (CMA) and three in the UAE, planning to list across sectors like technology, healthcare, and logistics.

Saudi Arabia dominated Q1 2025, hosting 12 of the 14 IPOs. The Tadawul Main Market saw significant activity, with Umm Al Qura for Development & Construction raising $523 million (22 per cent of total proceeds) and Almoosa Health Group contributing $450 million (19 per cent). The Tadawul Nomu Parallel Market added seven smaller IPOs, raising $69 million, alongside one direct listing by Twareat Medical Care Company.

The UAE recorded one IPO on the Abu Dhabi Securities Exchange (ADX), with Alpha Data, a software and IT services firm, raising $163 million. Oman’s Muscat Stock Exchange (MSX) also contributed, with Asyad Shipping Company SAOG generating $333 million.

Mena stock exchanges performed strongly, with the Boursa Kuwait Premier Market Index leading at a 10.7 per cent gain, followed by the Egyptian Exchange (EGX30) at 8.0 per cent. Eleven of the 14 IPOs delivered positive returns by quarter’s end, signaling strong investor confidence.

Brad Watson, MENA EY-Parthenon leader, noted: “Mena capital markets continue to show resilience, with the total IPO value more than doubling compared to the same period last year.” He highlighted Saudi Arabia’s dominance and a remarkable pipeline for 2025.

Dubai’s capital markets, in particular, are gaining global prominence.

HSBC’s 2025 report underscores Dubai’s ambition to rank among the world’s top four financial hubs, driven by foreign investor participation and dynamic market growth. From 2016 to 2024, the Dubai Financial Market (DFM) delivered an annualized dollar return of 4.9 per cent, outpacing the MSCI Emerging Markets Index’s 2.8 per cent. In 2024, foreign investors accounted for 50 per cent of DFM trading activity, with 85 per cent of new investors being international.

The Dubai International Financial Centre (DIFC) saw a 16 per cent year-on-year increase in wealth and asset managers, reaching 410, including 48 hedge funds managing over $1 billion in assets.

Dubai’s IPO market captured 2.2 per cent of global IPO volumes in 2024, with Talabat’s listing marking the world’s largest tech IPO that year.

Mohamed Al Marzooqi, CEO of HSBC Bank Middle East UAE, emphasised Dubai’s appeal, citing its openness to global talent and innovative ecosystem. The emirate’s debt capital markets (DCM) also thrived, with Nasdaq Dubai hosting $22 billion in debt from Chinese corporations and 45 per cent of fixed income listings from non-UAE issuers in 2024. Sukuk issuance surged 42 per cent year-on-year to $4.71 billion in Q1 2025, comprising 76 per cent of Nasdaq Dubai’s DCM activity, reinforcing Dubai’s leadership in Islamic finance.

Gregory Hughes, EY Mena IPO leader, highlighted the region’s focus on governance and transparency, noting, “The upward trajectory in IPOs reflects sector diversification, with investors and companies looking beyond traditional oil-based industries.” He anticipates a rise in technology-driven IPOs, including fintech and foodtech, in 2025.

A 2025 PwC report projects continued IPO momentum in the GCC, with technology and healthcare sectors leading, supported by government privatization efforts and foreign investor interest. Despite oil price volatility, Mena’s capital markets remain a beacon of growth, offering diverse opportunities for investors and issuers alike.

Issac John

issacjohn@khaleejtimes.com