(MENAFN- Khaleej Times)

The initial public offering (IPO) landscape in the UAE continues to strengthen as companies tap buoyant investor appetite, regulatory reforms and supportive macroeconomic conditions.

While overall Mena IPO activity saw 11 listings raising about $0.7 billion in the third quarter of 2025, the UAE remains one of the most closely watched markets in the region, with a growing pipeline of listings expected to come to market over the next several quarters.

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According to the latest EY IPO Eye Q3 2025 report, the number of IPOs in the wider region rose by 120 per cent compared with the same period a year earlier, driven largely by mid-market offerings.

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While Saudi Arabia maintained the highest volume of issuances with eight IPOs raising $637 million, the UAE's momentum lies in its strengthening ecosystem: expanding market depth, new sector participation, and regulatory enhancements that continue to broaden both issuer and investor bases.

In the past three years, the UAE has re-established itself as one of the most active IPO destinations outside Asia. High-profile listings by entities across utilities, real estate, logistics, energy services and technology-alongside strong after-market performance-have helped deepen investor confidence. The Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) have both benefited from government-led programmes encouraging state-linked and family-owned enterprises to go public, while free zone and private-sector firms are increasingly exploring market listings as part of their expansion strategies.

Market analysts note that liquidity in the UAE equity markets has also improved meaningfully, aided by increased participation from institutional investors and sovereign funds.

The ADX in particular has attracted strong international inflows due to large-cap issuances and its enhanced trading infrastructure, while the DFM has seen renewed local and regional retail participation. The combination of compelling valuations, steady dividend policies, and visibility of earnings among listed entities has provided a foundation for sustained market confidence.

The third quarter of 2025 was notable for strong exchange performance across key regional indices. The MSCI Emerging Markets Index rose 25 per cent during the period, while Egypt's EGX30 Index gained 23.3 per cent and the Boursa Kuwait Premier Market Index climbed 19.6 per cent.

These gains underscore investor resilience despite shifting global interest rates and continued macroeconomic uncertainty. Within this environment, the UAE has emerged as a stable and predictable market for investors seeking long-term exposure to diversified regional growth.

One of the defining features of the current cycle is the range of sectors preparing to list. In the UAE, firms spanning infrastructure contracting, education services, energy logistics, advanced manufacturing, technology and consumer services are in varying stages of preparation for public offerings. ALEC Holdings' successful listing on the Dubai Financial Market in October 2025 demonstrated confidence in the contracting and project delivery sector at a time of robust real estate and infrastructure growth.

The broader Mena pipeline also signals stronger activity ahead. Nineteen companies and funds are currently preparing to list across the region, with 13 based in Saudi Arabia. These include companies in education, retail and diversified services, reflecting continued non-oil economic development.

Companies in Algeria and Morocco are also preparing to tap public markets pending regulatory approvals, pointing to a wider regional capital formation trend.

Regulatory reform has played a meaningful role in improving market attractiveness. The UAE has updated corporate governance rules to allow boards more flexibility in senior leadership structures under specified oversight requirements. Meanwhile, Saudi Arabia's Capital Market Authority is consulting on adjustments to market-making regulations and foreign ownership limits, aimed at improving transparency, liquidity and stability across exchanges. These steps mirror global capital market standards and are expected to support stronger foreign investor participation.

In the UAE specifically, the IPO narrative aligns closely with the country's economic diversification strategy. Expanding public markets help support private-sector scale-up, deepen liquidity pools, and channel domestic savings into productive investment. They also provide UAE-based enterprises with access to capital that can accelerate their regional and global growth ambitions.

Investor sentiment remains constructive heading into the final quarter of the year and into 2026, supported by stable economic fundamentals, robust earnings performance across key sectors, and government-led infrastructure and industrial expansion.

Analysts observe that UAE-based IPOs have generally demonstrated consistent post-listing performance, aided by dividend visibility and strong underlying sector demand-factors that institutional investors continue to prioritise.

Market observers say that the UAE's IPO environment is maturing, with companies becoming more strategic in their timing, disclosures and valuation positioning. This shift reflects a marketplace that is more competitive, more global in investor participation, and more disciplined in capital allocation.

With a healthy IPO pipeline, strong regulatory momentum and improving liquidity, the UAE's capital markets are expected to remain a key driver of investment activity and corporate growth in the region. The current cycle suggests that the trend is not temporary, but structural - anchoring the UAE's position as a rising global capital market hub, analysts say.

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