Saudi Arabia leads Gulf IPO activity in Q1 on Nomu launch

Saudi Arabia was the most active market for initial public offerings (IPOs) in the GCC in Q1 2017, following the launch of the Nomu parallel market in February, PricewaterhouseCoopers (PwC) said in a report on Tuesday.

The Kingdom had eight IPOs on Tadawul, out of which seven were listed on Nomu – the region’s first parallel market aimed at smaller cap firms. A total of $157 million was raised, PwC said.

Meanwhile, the GCC overall saw 10 IPOs in the first quarter, a record high, compared to one listing in Q1 2016.

However, total proceeds raised in Q1 were 15 percent lower year-on-year (YoY), mainly due to Nomu’s lower market capitalisation requirement compared to Tadawul.

On the primary exchange front, the first and largest regional offering in Q1 2017 was by Qatar-listed Investment Holding Group (IHG), which operates various contracting businesses.

IHG – which is the first Qatari IPO on the Qatar Stock Exchange since 2014 – offered 49.8 million shares, raising proceeds of $138 million.

The second offering was by AlJazira Mawten REIT fund on Tadawul, offering 11.8 million shares and raising $31 million.

The third and final listing was by Emirates NBD REIT fund on Nasdaq Dubai, offering 94.6 million shares and raising proceeds of $105 million. The fund invests in sharia-compliant real estate assets in the UAE.

“As the region continues to adjust to a different oil price environment, we are starting to see signs of market recovery and activity which are positive indicators to what we hope to be an improved year for IPOs in the region,” said Steve Drake, partner and head of the capital markets and accounting advisory services team at PwC, Middle East.

“Furthermore, government initiatives across the region, including large scale privatisation activity, [are] expected to boost capital markets activity in the next couple of years,” he added.