Markaz: KSA & UAE Lead GCC IPO Activity in Q3

Saudi Arabia (KSA) and the UAE led the initial public offering activity in the GCC in the third quarter of the year, raising US$1.7 billion, a 6 percent increase from the previous year, an analysis showed.

According to a new report from the Kuwait Financial Center, also known as Markaz, the UAE dominated the quarter’s activity, leading the region with US$1.1 billion in IPO proceeds from a single listing, accounting for 69 percent of the total raised across the GCC.

Saudi Arabia followed with US$512 million from its IPOs in the third quarter, contributing 31 percent to the overall regional total.

This comes as the GCC region has emerged as a hotspot for IPOs in recent years, fueled by robust economic reforms, diversification efforts away from oil dependence, and growing interest from both regional and international investors. In the first nine months of 2024, GCC issuers raised US$5.2 billion from 30 offerings, compared to US$6.8 billion from 29 offerings during the same period the previous year.

Saudi Arabia, in particular, has intensified its privatization and diversification initiatives in sectors such as health care, technology, and renewable energy, making its market increasingly attractive.

“Saudi Arabia’s Tadawul (stock exchange) saw a total of US$459 million and US$53 million listed (in the third quarter) on its main market and Nomu-parallel market, respectively, together constituting 31 percent of the total GCC IPO proceeds. Other exchanges in the GCC have not seen any listings during the quarter,” said Markaz.

The report follows an announcement by Lulu Retail Holdings, which runs one of the Middle East’s biggest hypermarket chains, to float 2.58 billion shares, representing 25 percent of the company’s capital, on the Abu Dhabi Securities Exchange.

Sector allocation

Sector-wise, the energy industry led the way, with Abu Dhabi-based construction company NMDC Energy’s US$1.1 billion IPO on the ADX representing 69 percent of the region’s total proceeds for the third quarter.

In Saudi Arabia, the food and beverage sector saw wheat milling company Arabian Mills for Food Products raise US$271 million, accounting for 16 percent of the quarter’s proceeds.

Meanwhile, perfume maker Al Majed for Oud, a key player in the consumer cyclical sector, raised US$188 million, contributing 11 percent.

The materials sector had a smaller presence, with ASG Plastic Factory Co. raising US$8.8 million on Tadawul’s parallel Nomu market.

The commercial and professional services sector witnessed three IPOs, including First Avenue Real Estate Development Co., Altharwah Albashariyyah Co., and Al Ashghal Almoysra Co., which collectively raised US$44.4 million.

In May, a report from PwC projected that IPOs in the Middle East are expected to maintain momentum in 2024, with the Saudi Exchange emerging as a dominant force in the GCC equity market.

That same month, Mohammed Al-Rumaih, CEO of the Saudi bourse, said that the introduction of market-making and the launch of single stock options have enhanced Tadawul’s appeal to international investors.