News Column

IPOs in GCC grow 183% in first quarter of 2014

May 8, 2014

Staff Report

Abu Dhabi: Initial Public Offerings (IPO) in the GCC countries in the first quarter of 2014 showed improvements in terms of offering value as total proceeds raised were 183 per cent higher than in the first quarter of 2013.

However, volumes remained relatively stable at two offerings, according to PricewaterhouseCoopers (PwC), an accounting and consulting firm.

The Qatar Exchange saw its first IPO since 2010 with the listing of Mesaieed Petrochemical Holding Company raising $881 million (Dh3.2 billion). The company offering received a strong response from investors being five times oversubscribed, and is expected to act as a catalyst for other companies to consider floating on the Qatar Exchange.

Saudi Marketing Company was the second IPO in the quarter, raising $72 million on the Tadawul Stock Exchange.

Gulf Marine Services, a UAE-based private equity backed company, also listed on the Premium Market of the London Stock Exchange in March, raising $296 million.

"Although we have seen an increase in values in the first quarter 2014, we are still not seeing significant IPO activity on our regional markets. In Saudi Arabia, there is a strong pipeline, for example, but companies are taking time getting through the CMA review process," said Steve Drake, head of PwC'sCapital Markets in the Middle East.

He added that the UAE has seen appetite mostly for cross-border offerings rather than local exchange offerings.

Europe activity

As for the European IPO market, it is enjoying buoyant conditions driven by rising market confidence, and suppressed demand for new shares as investors seem relieved that the Eurozone crisis has dwindled.

European IPO activity strongly outperformed in the first quarter of 2014 both in terms of number of transactions, and money raised, which totalled $16.1 billion from 42 IPOs, whereas the first quarter of 2013 saw $5.7 billion from 18 IPOs.

In fact, nine of the quarter's 20 largest IPOs around the globe were executed in Europe.

Although IPO activity was spread across the continent, the London Stock Exchange remained the leading European exchange with five out of the top 10 European IPOs listing in London.

Overall, the UK IPO market saw 26 IPOs of the total 42 IPOs in the period, raising a combined total of $8.5 billion.

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Source: Gulf News (United Arab Emirates)

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