The number of companies set to debut on Gulf markets is expected to increase this year as businesses queue up to list on markets in Saudi Arabia and the UAE, according to a research report by Kamco Invest.
“We expect GCC IPO markets to remain active in 2021, and there are a number of catalysts for believing so,” Thomas Mathew, assistant vice president of investment strategy and research at Kamco Invest, said in the report.
“In terms of sectors, newer consumer-linked businesses, with asset-light models that focus on digitisation, technology disruption and healthcare that gained business market share in 2020 from the impact of Covid-19, could look at raising capital for further growth and could warrant higher valuations. Government support is also driving a higher pipeline,” he added.
The GCC IPO market remained active in 2020 despite the Covid-19-led market sell-off seen in early 2020. However, issuances picked up in the second half of the year.
The number of IPOs from the GCC on regional and international exchanges declined to seven in 2020, from 12 in 2019. Proceeds from GCC issuers both on regional and international exchanges slumped to $1.87 billion in 2020, from $29.04bn in 2019, according to Kamco Invest. The prior-year figure included the $25.6bn IPO of Saudi Aramco – the world's biggest stock market debut.
The IPO market in the GCC could have witnessed higher activity in 2020, particularly in the first half, but issuers chose to defer their primary market entrances until secondary markets recovered from the impact of Covid-19. This led to the backend-loaded issuances in 2020, while other issuers pushed their ambitions into 2021, the research note said.
Four out of the seven GCC IPOs debuted on the Tadawul Stock Exchange, the biggest Arab bourse. Saudi Arabia also dominated in terms of IPO proceeds, accounting for 78 per cent of issuances at $1.45bn.
Qatar registered a primary issuance, with the IPO of QLM Life & Medical Insurance Company, which raised $178 million in December. The UAE re-entered regional IPO markets with the listing of Al Mal Capital Reit worth $95.3m.
Saudi Arabia's healthcare operator Dr Sulaiman Al Habib Medical Services' public offering was the largest IPO in the region last year, with proceeds of $698.6m, followed by retailer Bin Dawood Holding, which raised $585.1m through its share sale.
"Saudi Arabia should continue to the lead the way, with the number of IPO applications in the pipeline reportedly in double digits," Mr Mathew told The National.
“For the UAE, the most important catalysts in 2021 are the launch of the Nasdaq Dubai Growth Market for SME companies, and the impact of the Dubai Expo in H2 2021.
“UAE issuers who deferred their market debut in 2020 are likely to consider 2021, but will be monitoring secondary market performance and volatility, and the unwinding of the impact of Covid-19, including the effectiveness of the vaccine.”
For the UAE, the most important catalysts in 2021 are the launch of the Nasdaq Dubai Growth Market for SME companies, and the impact of the Dubai Expo in H2 2021
Global IPO volumes increased 15 per cent annually to reach 1,322 issuances in 2020, according to Ernst & Young. IPO proceeds rose 26 per cent in 2020 to $263bn, the highest level since 2010. The increase in IPO proceeds was driven by a 69 per cent annual growth in amounts raised by US companies at $86bn, while the number of new issuances rose 32 per cent year-on-year to 222.
Issuance proceeds in China, including Hong Kong, jumped by 51 per cent annually to $116bn. The number of IPOs in the market grew 41 per cent to 514, EY said. Europe clocked 9 per cent growth in terms of IPO proceeds at $27bn and 17 per cent in the number of transactions, to 176.
Technology raked in 35 per cent of proceeds from IPOs globally, and accounted for 24 per cent of all deals. Healthcare companies came in second with 16 per cent of proceeds and 15 per cent of volumes, EY said in its report.
Special purpose acquisition companies were an increasingly popular IPO route in 2020 and witnessed a jump from 60 listings totalling $13.7bn of proceeds in 2019 to 230 listings garnering total issuance proceeds of $75.8bn in 2020, according to EY.
Globally, the two largest issuances were from secondary public offerings, with Semiconductor Manufacturing International raising $7.5bn from its debut in Shanghai. JD.com followed with its Hong Kong listing and raised $4.5bn.
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
RESULTS
6.30pm: Maiden (TB) Dh 82,500 (Dirt) 1.600m
Winner: Miller’s House, Richard Mullen (jockey), Satish Seemar (trainer).
7.05pm: Maiden (TB) Dh 82,500 (D) 2,000m
Winner: Kanood, Adrie de Vries, Fawzi Nass.
7.50pm: Handicap (TB) Dh 82,500 (D) 1,600m
Winner: Gervais, Sandro Paiva, Ali Rashid Al Raihe.
8.15pm: The Garhoud Sprint Listed (TB) Dh 132,500 (D) 1,200m
Winner: Important Mission, Royston Ffrench, Salem bin Ghadayer.
8.50pm: The Entisar Listed (TB) Dh 132,500 (D) 2,000m
Winner: Firnas, Xavier Ziani, Salem bin Ghadayer.
9.25pm: Conditions (TB) Dh 120,000 (D) 1,400m
Winner: Zhou Storm, Connor Beasley, Ali Rashid Al Raihe.
'The Woman in the House Across the Street from the Girl in the Window'
Director:Michael Lehmann
Stars:Kristen Bell
Rating: 1/5
The specs
Price, base / as tested Dh135,000
Engine 1.6L turbo
Gearbox Six speed automatic with manual and sports mode
Power 165hp @ 6,000rpm
Torque 240Nm @ 1,400rpm 0-100kph: 9.2 seconds
Top speed 420 kph (governed)
Fuel economy, combined 35.2L / 100km (est)
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Newcastle 2-2 Manchester City
Burnley 0-2 Crystal Palace
Chelsea 0-1 West Ham
Liverpool 2-1 Brighton
Tottenham 3-2 Bournemouth
Southampton v Watford (late)
RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
MATCH INFO
Scotland 59 (Tries: Hastings (2), G Horne (3), Turner, Seymour, Barclay, Kinghorn, McInally; Cons: Hastings 8)
Russia 0
If you go
The flights
Emirates (www.emirates.com) and Etihad (www.etihad.com) both fly direct to Bengaluru, with return fares from Dh 1240. From Bengaluru airport, Coorg is a five-hour drive by car.
The hotels
The Tamara (www.thetamara.com) is located inside a working coffee plantation and offers individual villas with sprawling views of the hills (tariff from Dh1,300, including taxes and breakfast).
When to go
Coorg is an all-year destination, with the peak season for travel extending from the cooler months between October and March.
