By Santhosh V Perumal/Business Reporter The initial public offerings (IPOs) in the Middle East and North Africa (Mena) are likely to remain strong this year on better market fundamentals, according to Ernst & Young (E & Y). "There is a strong pipeline of good quality businesses preparing to IPO over the next nine months," Phil Gandier , Mena transaction advisory services leader, E & Y said. Finding that it usually takes 12 to 18 months for companies to get ready to float and there is plenty of preparatory work under way, he said if macroeconomic conditions in the region continue to improve, the next 18 months to two years will be quite busy. Following a "strong" up-tick in listings in the last quarter of 2013, the Mena region has a total of seven deals raising $726.2mn , E&Y said in a report. In Q4 2013, seven IPOs in Mena recorded a 133% increase in terms of volume and 114% in terms of value compared to Q4 2012, it said, adding Q4 registered the highest value of IPOs since 2008. The largest IPO was from UAE with Damac Real Estate Development listing on the London stock exchange and raising $348mn in a global depository receipt offering. Two other IPOs from the UAE were also in the UK , with two in Oman and one each in Saudi Arabia, Morocco and Tunisia . "The Mena IPO market is rebounding and recovering," Gandier said. The improving macro-economic backdrop driving up stock market valuations and rising investor confidence in key markets saw the IPO year end on a high, the report said. Additionally, in its Capital Confidence Barometer report, 73% of executives in Mena see the local economy improving, with the highest percentage of confidence being in indicators such as economic growth (70%), employment growth (64%) and credit availability (59%). "The confidence in these indicators bodes well for the region as economic growth and credit availability are key drivers for the IPO market," Gandier said. In 2013, E & Y said 23 Mena IPOs raised $3bn , a 64% increase in terms of volume and 51% increase in terms of value compared to 2012. Tunisia led with nine IPOs, followed by five in Saudi Arabia, four in Oman , three in the UAE and one each in Iraq and Morocco . "Family businesses are increasingly looking at IPOs as a means of monetising wealth, raising capital and institutionalising the business and the MCSI upgrading of Qatar and UAE to emerging markets may help to boost interest in the region," he said. Financial services was the leading sector in 2013 by deal volume with seven IPOs, followed by three in the power and utilities sector and two each in transport and the real estate sector.
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