Tuesday, 22 May 2018 09:13 GMT
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Mideast records five-fold jump in IPOs activity



(MENAFN - Khaleej Times) Funds raised through Initial Public Offerings (IPO) in the Middle East recorded a five-fold jump in the first three months of 2010 over first quarter of last year, according to Ernst & Young, one of the largest professional services firms in the world. Regional IPOs in the first quarter of this year raised $420.5 million from six IPOs compared to $83.6 million in the same period last year. “The trend mirrors the performance of the global IPO markets in Q1 2010. The regional upturn in number and size was largely based on the performance of the Saudi and Qatari markets,” Phil Gandier, Head of Transaction Advisory Services for Ernst & Young Middle East, said. The regional markets also performed better than the last quarter, which raised $91.6 million in fourth quarter 2009 from five IPOs. “While it’s too early to decree that markets have rebounded, this could potentially signal the return of normalcy to the markets, which had a very difficult 2009,” Gandier said. Five IPOs in Saudi Arabia and one in Qatar made up the geographical composition of the regional IPO market for the first quarter of 2010. Mazaya Qatar Real Estate Development with an offer size of $144.2 million was the Middle East’s largest IPO, followed by Saudi Arabia’s Herfy Food Services at $110.2 million and Alsorayai Trading Industrial Group raised $64.8 million. Solidarity Saudi Takaful, Amana for Cooperative Insurance and Wataniya Cooperative Insurance were the other three with offer sizes of $59.2 million, $34.1 million and $8 million respectively. Saudi Arabia also led the IPO tally in the previous quarter â€" three out of the five Middle East IPOs were in the Kingdom. The largest oversubscription in the first quarter was received by Herfy Food Services at 4.6 times offer size. This could be symptomatic of the caution with which new IPOs will be greeted in 2010. “We may not see the hundreds or even tenfold oversubscriptions that were witnessed during the boom years. Firms will need to invest more time and resources in preparing their institution for an IPO and ensuring they have a compelling equity story. While challenging markets will come and go, it’s the companies that are fully prepared that will best be able to leverage IPO opportunities when they open,” Gandier said. Out of the total six IPOs this quarter, three were in the insurance/Takaful sectors. This trend was also observed in the previous quarter, when the regional markets went through a difficult phase. “Insurance licensing procedures in Saudi Arabia, which opened up the sector to new entrants in 2005, oblige newly licensed firms to offer a percentage of their shares to the public within a set timeframe,” Gandier said. By Abdul Basit


Mideast records five-fold jump in IPOs activity

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