Dubai : Initial public offering (IPO) activity in the Middle East and North Africa (Mena) region will remain on a strong footing this year as market conditions and investor appetite continue to improve, Ernst & Young (EY) said on Wednesday. The advisory and auditing company's latest Mena IPO update reported that listings started to gain ground in the last quarter of 2013, which recorded a total of seven deals raising around $726.2 million (Dh2.6 billion). Last year saw 23 Mena IPOs with total proceeds reaching $3 billion , a 64 per cent increase in terms of volume and 51 per cent increase in terms of value compared to 2012. Tunisia emerged as the top performer with nine IPOs. Saudi Arabia came second with five IPOs, followed by four in Oman , three in UAE and one each in Iraq and Morocco . "The Mena IPO market is rebounding and recovering. The improving macroeconomic backdrop driving up stock market valuations and rising investor confidence in key markets saw the IPO year end on a high. [The last quarter saw] an increase in both volume and value compared to 2012, registering the highest value of IPOs since 2008," said Phil Gandier , Mena transaction advisory services leader at EY. The region's capital markets recently suffered against a backdrop of Arab Spring, volatile stock markets and low liquidity levels. IPO activity fell substantially in the first half of 2011 and remained subdued in the first quarter of last year. Ernst & Young also highlighted in another report, the Capital Confidence Barometer, that investor sentiment is looking good, with 73 per cent of executives in Mena saying they see the local economy improving. Gandier said IPO activity has yet to reach pre-financial crisis levels, but there has been a notable improvement in performance. "The state is set for this momentum to continue across the region, and we expect the strong performance in the US and Europe to reflect in Mena," he added. Shailesh Dash , CEO of Al Masah Capital said there are strong signs that the region will pump out a regular stream of high-profile IPOs this year. He said last year's market rally has positively impacted investor appetite, adding that businesses are now more stable and executives eager to explore the IPO market. "The MSCI upgrade is also changing perceptions. For the regional markets to build on last year, a healthy IPO pipeline is essential for the next phase of the growth cycle," Dash told Gulf News on Wednesday. Index compiler Morgan Stanley Capital International Inc earlier upgraded the UAE to emerging market status.
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