The GCC could be headed for another bumper year for initial public offerings in 2024, thanks to governments in the region pushing for privatisation, the growing appetite of private sector companies to raise capital and strong investor demand, according to companies and analysts.
Stellar post-listing performance of regional companies – returning an average of 40 per cent to investors – has increased the popularity of IPOs, leading to a rise in the pipeline for new public floats.
“Past trends of strong [investor] interest and post-listing market performance with a clear positioning of growth prospects, should encourage IPO candidates to enter the primary market with confidence,” said Thomas Mathew, vice president of investment strategy and research at investment strategy and research company Kamco.
Companies from the GCC region raised a total of $10.79 billion in IPOs last year, data showed.
Although the overall value of funds raised through primary public listings dropped by about 55 per cent annually, the number of IPOs in the GCC declined marginally to 46 issuances in 2023 from 48 issuances in 2022, according to data from Bloomberg and stock exchanges.
The volume of issuances across the GCC last year was driven by smaller ticket listings resulting in lower proceeds.
However, the positive performance of the majority of these stocks is expected to encourage more firms to list.
Dividend yields from recurring revenue-generating companies, mostly state-owned enterprises, were highly sought after, pushing demand for their share offerings.
Analysts say companies with IPO plans and the investment bankers they have hired will pitch the issuances to potential investors on price appreciation prospects.
A 5 to 6 per cent dividend yield, according to the trends of the past two years, will be another selling point.
UAE and Saudi Arabia lead the ranks
The UAE, the Arab world's second-largest economy, topped in terms of the funds raised last year in the GCC through IPOs. Issuers secured $6.07 billion from eight listings on UAE exchanges, accounting for about 56.3 per cent of total proceeds, according to data from Kamco.
The Abu Dhabi Securities Exchange was the top regional bourse with $4.9 billion, followed by the Dubai Financial Market with $500 million.
Companies raised $3.5 billion on the Saudi Exchange (Tadawul) with 35 offerings, recording the highest number of IPOs in the GCC during 2023 and 35 per cent of total proceeds.
The Muscat Securities Market listed two IPOs with total proceeds of $973 million, while one listing on the Qatar Exchange raised $193 million.
Despite a drop in both value and volume, the broader Middle East region along with China were the bright spots in the global IPO market, according to PwC’s Global IPO Watch 2023 and outlook for 2024 report.
China was the largest IPO market globally, with companies raising $45.3 billion in deals that included three of the world’s top 10 listings last year.
Equity market performance in 2023 remained strong in most markets. The MSCI World index climbed more than 22 per cent, supported by a 24 per cent rise in the S&P 500, a 4 per cent jump in the FTSE100 and a 12 per cent advance of Stoxx Europe 600.
PwC remains cautiously optimistic about the IPO momentum globally as the macroeconomic landscape stabilises this year.
“The renewed optimism is tempered by geopolitical uncertainties and with elections in 2024 for a significant proportion of the world's population, IPO windows will rapidly open and close,” said Stuart Newman, global IPO centre leader at PwC.
The Middle East and North Africa region also has a healthy pipeline of IPOs this year, according to EY.
“IPOs [in Mena] remain driven by the dominant economies of Saudi Arabia and the UAE, which are pursuing their strategic agenda of increasing capital market activity on the local exchanges and stepping up efforts to attract foreign investment,” said Brad Watson, EY Mena strategy and transactions leader.
Increasing visibility
Companies also view IPOs as an attractive option given the current interest rate environment, according to analysts.
Abu Dhabi-based blockchain and crypto solutions company Phoenix Group, which began trading on the Abu Dhabi Securities Exchange in December following a $370 million IPO, said fund-raising through a share sale is a viable option for companies looking to finance expansion.
The IPO deal of Phoenix, which offers services including cloud mining, data centre hosting and crypto trading, was 33 times oversubscribed.
“Phoenix group is in the next phase of growth and needed capital to fuel its expansion, hence the decision to go public and list on ADX,” said an official for the company.
“The benefits of going public are abundant, including increased capital, visibility, and the ability to attract top talent,” said Sam Barnett, chief executive of MBC Group.
“However, it also comes with the challenge of meeting regulatory requirements and managing public expectations, which we are prepared to navigate.”
In December, the MBC Group raised 831 million riyals ($221.6 million) through the sale of a 10 per cent stake in a public offering on the Tadawul.
“The IPO is our strategy to amplify our market position, broaden our audience reach and bolster investments in our flagship streaming platform, Shahid, as well as other promising entertainment verticals,” he said.
Pharmaceutical company Avalon Pharma, which plans to raise $131 million through an upcoming Tadawul listing, is selling 6 million shares or 30 per cent of its capital to investors.
The IPO is the “next step in the maturity of our company and something we have been considering for the past few years”, chief executive Mohamed Al Ghannam told The National.
“Through the listing of the shares, we increase visibility and … in the long term, we can access potential sources of funding if needed.”
Avalon Pharma, which produces and promotes consumer health, beauty brands and generic drugs, aims to launch new products and expand its regional footprint, he added.
“We have a clear growth strategy not only till 2027 … but until 2030 as well.”
The company, which recorded 338 million riyals in revenue last year, seeks to double that amount by 2027 and reach 1 billion riyals in revenue by 2030.
GCC companies will continue to list their shares in the coming months amid significant reforms on the back of “favourable market dynamics which provide the opportunity and the appetite for founders of these companies to list their business or their companies and sell the stake”, Mr Al Ghannam said.
While government initiatives such as the Saudi Vision 2030 and the privatisation of state-owned assets in the UAE led the initial phase of IPOs in the GCC, the next phase is being driven by family-owned businesses, according to PwC.
The significant premium at which most shares traded from their IPO prices last year will prove to be a momentum builder for companies and investment banks to push for more deals, analysts said.
Most GCC public floats recorded strong trading momentum post-listing, with Ades Holding and ADX-listed Pure Health both rising more than 70 per cent on debut, according to PwC.
While shares of Adnoc Logistics and Services surged 58 per cent on the listing, Dubai Taxi, Adnoc Gas and Phoenix rose 19 per cent and 18 per cent each.
Most of these shares continue to trade above their listing prices.
While Ades Holding closed at 19.22 Saudi riyals, about 42 per cent higher than its listing price on Monday, Pure Health shares were up 45.7 per cent from its listing price of Dh3.26. As Adnoc L&S closed 97 per cent above its IPO price, Dubai Taxi and Adnoc Gas closed 27 per cent 34 per cent higher, respectively, from their listing prices.
“The competitive position of IPOs as an investment option and dividend yield expectations will be key drivers”, in attracting new investors, Kamco’s Mr Mathew said.
While Saudi Arabia and the UAE are likely to keep the lead position for IPOs this year, Oman is expected to emerge as a significant player with the potential listing of many state-owned assets.
Oman’s sovereign wealth fund, the Oman Investment Authority, is set to launch about 30 IPOs, according to Thuraiya Al Balushi, the wealth fund’s manager for economic diversification.
“OIA aims to enhance private-sector participation to deepen the capital market, paving the way for an upgrade by MSCI from frontier to emerging-market status,” Ms Al Balushi told Bloomberg in December.
Oman's OQ Gas Network IPO was the fourth largest public float in the region last year, raising $771 million. Abraj Energy Services also raised $244.1 million through its listing.
“A repeat of 2023 is possible,” Mr Matthew said.
However, “we also believe that … [the market] will be dominated by a fewer number of larger issues,” which will grow the value of deals significantly, he added.
Despite strong investor demand, analysts do not see a repeat of the 2022 boom that was led by big-ticket IPOs such as the $6.1 billion issuance of Dubai Electricity and Water Authority or the $1.3 billion IPO of Saudi Aramco Base Oil Company Luberef.
Factors such as interest rates, geopolitics, stock market volatility and oil prices will continue to remain crucial in 2024 for the pipeline of 28 to 30 companies that have announced listing plans or are rumoured to seek a listing, according to Kamco.
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Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
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- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
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Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
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Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
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Killing of Qassem Suleimani
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
UAE currency: the story behind the money in your pockets
AndhaDhun
Director: Sriram Raghavan
Producer: Matchbox Pictures, Viacom18
Cast: Ayushmann Khurrana, Tabu, Radhika Apte, Anil Dhawan
Rating: 3.5/5
You may remember …
Robbie Keane (Atletico de Kolkata) The Irish striker is, along with his former Spurs teammate Dimitar Berbatov, the headline figure in this season’s ISL, having joined defending champions ATK. His grand entrance after arrival from Major League Soccer in the US will be delayed by three games, though, due to a knee injury.
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Wes Brown (Kerala Blasters) Revived his playing career last season to help out at Blackburn Rovers, where he was also a coach. Since then, the 23-cap England centre back, who is now 38, has been reunited with the former Manchester United assistant coach Meulensteen, after signing for Kerala.
Andre Bikey (Jamshedpur) The Cameroonian defender is onto the 17th club of a career has taken him to Spain, Portugal, Russia, the UK, Greece, and now India. He is still only 32, so there is plenty of time to add to that tally, too. Scored goals against Liverpool and Chelsea during his time with Reading in England.
Emiliano Alfaro (Pune City) The Uruguayan striker has played for Liverpool – the Montevideo one, rather than the better-known side in England – and Lazio in Italy. He was prolific for a season at Al Wasl in the Arabian Gulf League in 2012/13. He returned for one season with Fujairah, whom he left to join Pune.
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
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Men:
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The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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Most sought after workplace benefits in the UAE
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- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
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London Spirit: Kieron Pollard, Riley Meredith
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Manchester Originals: Andre Russell, Wanindu Hasaranga, Sean Abbott
Northern Superchargers: Dwayne Bravo, Wahab Riaz
Oval Invincibles: Sunil Narine, Rilee Rossouw
Trent Rockets: Colin Munro
Birmingham Phoenix: Matthew Wade, Kane Richardson
Southern Brave: Quinton de Kock
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Sheffield Wednesday v Manchester City
Reading/Cardiff City v Sheffield United
Chelsea v Shrewsbury Town/Liverpool
West Bromwich Albion v Newcastle United/Oxford United
Leicester City v Coventry City/Birmingham City
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Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
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Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
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