UAE, GCC IPO pipeline to remain robust in the near future: study

The UAE and GCC initial public offering (IPO) markets, which blossomed after the pandemic, will remain robust with more public and private sector companies taking this route in the near future, say analysts.

Led by the UAE and Saudi Arabia, the Gulf countries have seen a flurry of IPO activities in the past couple of years as public and private sector entities raised billions of dollars. In 2022 alone, 12 companies in the UAE raised $11 billion (Dh40.4 billion).

The aggregate value of UAE IPOs in 2022 was higher than in any year before 2008, according to data from S&P Global Market Intelligence.

“2023 will also see the IPO flurry continue in the UAE amid strong investor demand. The March listing of Dubai Electricity and Water Authority (Dewa) was the largest GCC IPO in 2022, raising $6.1 billion. Meanwhile, state-owned Salik, Empower and Tecom, collectively raised $2.2 billion in June, September and November, respectively. All of these are indicative of a concrete shift in mindset,” according to a report – Driver of Change – released by Mashreq Bank and Meed.

Dubai government had announced that it would list 10 entities on the Dubai Financial Market (DFM) in order to increase the market capitalization of the bourse to Dh3 trillion.

Mohamed Khalifa Al Hadari, deputy CEO of the Securities and Commodities Authority, has said that around 11 companies would like to list on the Abu Dhabi Securities Exchange including some companies operating in the free zones this year.

Abu Dhabi-based government-owned Adnoc Group has so far listed some of its entities on the capital’s bourse in order to attract more foreign investors into the equity markets.

The series of IPOs also help provide another income stream for the government.

“The IPO programme is likely to continue beyond the year-end, as the UAE has a list of investment-grade institutions that are looking to tap into a widening pool of local and regional capital, underpinned by the aim of making state-held entities more efficient and with more diverse sources of funding,” said Mashreq bank report.

The study further added that the opportunity to launch IPOs is currently stronger in the Middle East than in most parts of the world.

For the GCC region, 2022 was the best-performing year since 2019 from an IPO perspective in terms of both volume and proceeds.

“Against a backdrop of strong regional pipelines across both the public and private sectors, and increased investors’ awareness of the region’s potential, the momentum in IPO activity is expected to continue into the near future,” it said.

• Business