Mena IPO deal value increased by 222.6 percent to $2.82bn in Q2 2019, up from $874.9m in Q2 2018. Six deals were recorded in Q2 2019, including one REIT listing, a decrease of 33.3 percent from the nine deals listed in Q2 2018.
The second quarter of the year witnessed a sizeable improvement in IPO activity, both in volume and value, when compared to a single IPO that raised US$57.6m in Q1 2019.
EY MENA IPO Eye Report noted yesterday Global IPO exchange activity continued to pick up in Q2 2019, with 302 IPOs raising $56.8bn, marking an increase of 47.3 percent in IPO volumes compared with Q1 2019, despite the US-China trade tensions and uncertainties related to Brexit. Health care, technology, and the industrial sector remained the top three sectors by the number of IPOs issued during Q2 2019.
Gregory Hughes, MENA IPO Leader, EY, said: “The increase in IPO activity across the Mena region during the second quarter of this year, which included two cross-border listings, is proof that companies are still keen to execute IPOs and gain access to international investors and stock markets. The IPO deal value raised in the first half of 2019 has already nearly surpassed the total deal value raised in 2018.”
GCC countries focused on trading and investor opportunities in Q2. With MSCI’s announcement of upgrading Kuwaiti equities to its main Emerging Markets Index in 2020, it has been reported that Kuwait’s capital market will attract around $10bn of additional investor flows from passive funds.
Qatar announced plans to privatise its stock exchange with three to four listings each year to ensure a regular schedule of IPOs, which in turn would increase trading activity and liquidity as well as offer investors greater opportunities. The Qatar Stock Exchange is also considering adding a new Energy Index in 2019.
In line with the new Commercial Companies Law, the Government of Oman is planning to issue new regulations related to topics such as the listings of new companies, sukuks, and other debt funds. The new law is aimed at building a more robust capital market.
“Across the Mena region, IPO activity is expected to progress cautiously, with an optimistic outlook owing to events and themes such as the MSCI and FTSE inclusions, privatisation drives, and government initiatives,” added Gregory.
