EY: Saudi Arabia Drives MENA IPO Activity

Saudi Arabia continues to drive the initial public offering activity in the Middle East and North Africa, with 11 of the total 13 listings in the region coming from the Kingdom in the second quarter, according to global consultancy firm Ernst & Young. The firm’s MENA IPO Eye report showed the region maintained its listing momentum with a total of US$1.8 billion in proceeds from 13 IPOs in the second quarter, a 44% growth in number of offerings over the second quarter of 2022.

This includes one listing each in the Dubai and Abu Dhabi markets during the period. The Kingdom’s domination of the region’s IPO activity saw four listings on Tadawul’s main market in the second quarter, raising US$800 million, while seven on the parallel market Nomu fetched proceeds of US$100 million.

“The second quarter of 2023 confirmed that MENA IPOs are not experiencing the downward trend witnessed globally. The UAE and Saudi Arabia continue to be the most active markets in the MENA region in terms of both the number and size of IPOs,” Brad Watson, EY MENA IPO and Transaction Leader, said.

The biggest IPO on the Tadawul was made by Jamjoom Pharmaceuticals Factory Co. which raised US$336 million, followed by First Milling Co. raising US$266.4 million in the second quarter. Both were oversubscribed and given a free float of 30% of the company’s share capital.

The largest IPO in the UAE was completed by the Abu Dhabi Securities Exchange, also known as ADX, with Abu Dhabi National Oil Co., which raised US$769.5 million. The IPO received the most demand internationally for a transaction in 2023, with the issuance oversubscribed by 163 times — the biggest oversubscription for a UAE book-build IPO.

Al Ansari Financial Services was the first family-owned business in the UAE to list on the Dubai Financial Market, generating US$210.4 million in proceeds. “The MENA IPO pipeline for H2 2023 and 2024 remains very healthy with several IPOs already announced in KSA and multiple processes ongoing across the broader region, with further transactions planned in the UAE, Oman, Qatar, and Kuwait,” said EY MENA IPO and Transaction Diligence Leader Gregory Hughes. He added, “We see planned IPO activity across different sectors and from a combination of family business, state-backed enterprise and private equity stakeholders.”

According to EY analysis, the global economic picture in the first half of 2023 was influenced by crude price volatility, which climbed in January and February 2023 before falling abruptly around mid-March 2023.