Saudi IPOs attract record USD176bn in investor orders

(MENAFN) Saudi companies have seized the spotlight in the financial arena, amassing an impressive SR659 billion (USD176 billion) in orders for their initial public offerings (IPOs), signaling a fervent investor appetite eager to capitalize on the returns generated over the past couple of years.

This surge in demand for IPOs has eclipsed the record previously set by Saudi Aramco in 2019, marking a significant shift in the broader market dynamics, as reported by a UK-based news agency.

The impact of this heightened demand is palpable in the performance of the Tadawul All Share Index, which tracks the Kingdom's stock market. The index has experienced a notable decline of nearly 8 percent from its peak in March, trailing behind other emerging markets. Analysts attribute this dip partly to investors channeling their resources towards these new offerings, opting to hold onto cash in anticipation of lucrative opportunities presented by IPOs.

Marwan Haddad, lead portfolio manager for Middle East and North Africa equities at Azimut, observed, "There is a notable surge in demand and a rush to the market," reflecting the palpable excitement and investor confidence surrounding the IPO frenzy.

Saudi Arabia is poised to spearhead the surge in IPOs within the Middle East and North Africa region in 2024, with 27 companies eyeing listings on the Kingdom's main market, as indicated by an analysis conducted by the Dubai International Financial Center (DIFC).

A report by DIFC, in collaboration with the London Stock Exchange Group, underscores the promising IPO pipeline in the MENA region this year. Several companies have deferred their listings from 2023 to early and mid-2024 in anticipation of more favorable market conditions, further fueling optimism.

" Deals will be driven mainly by Saudi Arabia, where 27 companies have expressed intent to list on the Saudi Exchange (Tadawul), in addition to expected follow-on issuances from Aramco and Savola," stated DIFC, highlighting the Kingdom's pivotal role in shaping the regional IPO landscape.



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