DOHA: The Mena region raised $349.9m through four IPOs, in Q3 2018, according to the latest EY MENA IPO Eye report. Compared to Q3 2017, IPO value saw an increase year-on-year by 21.9 percent, while activity declined by 33.3 percent.
Phil Gandier (pictured), MENA Transactions Leader, EY, says:“In light of fluctuating oil prices and headwinds in the economy, IPO activity in the Mena region has been slow from Q1 to Q3 2018. However it is positive to see that IPO value increased year-on-year in Q3, especially when we’ve seen several entities across Mena delaying their plans for IPOs in 2018 due to various factors including (but not limited to) regulatory and global trade concerns and uncertain market conditions in a rising interest rate environment.”
In the wider Mena region, Egypt and Tunisia recorded one deal each. The IPO of Cairo for Investment & Real Estate Development Company raised $69.7m. The IPO program laid out by the Egyptian Government, which plans to list public sector companies on its stock exchange, has strengthened the prospects of future IPOs in the country that would promote local and foreign capital inflows.
The Government also has plans to introduce an IPO program offering minority stakes of state owned and private companies in various sectors, in the next three to five years.
Further, in North Africa, the Tunis Stock Exchange saw the IPO of Tunisie Valeurs in Q3 2018 raising $7.6m, following a yearlong gap of no activity. The improved classification of Tunisia by the FTSE Russell and MSCI, along with the World Federation of Exchanges (WFE) member status, received in October 2018, has reinforced the attraction of Tunisia for foreign investment.
Globally, IPO activity saw a significant slowdown in Q3 2018, with 302 IPOs raising $47.1bn, marking a decrease of 15 percent and 2 percent respectively, compared to Q2 2018. Current market and investor confidence fluctuations are causing companies to delay or pull out of planned IPOs in Q4 2018 despite the recovery in oil prices. Reasons for this could be current market and global trade uncertainties.
“Globally, the third quarter has been a relatively quieter period for IPO activity driven by geo-political tensions, trade issues between the US and China and the looming exit of the UK from the European Union, all of which have dampened investor confidence in the short term,” said Phil.
