Seven initial public offerings (IPOs) in the Mena region raised about $1.5 billion in the third quarter (Q3) of the year, bringing the total number of Mena IPOs in the year-to-date to 31, said professional services firm EY in a new report.

The region witnessed a 288% year-on-year increase in the number of companies listing during the first nine months of the year, raising $14.7 billion in total – up 550% on the same period last year, according to the latest EY Mena IPO Eye Q3 2022 report.

Globally, in the year-to-date, there have been a total of 992 IPOs, raising $146 billion, a 44% and 57% decrease year-on-year respectively as companies and investors continue to face mounting macroeconomic challenges, market uncertainties, increasing volatility and falling global equity prices.

The Mena region, however, has generally bucked the global trend with IPO activity and pipeline continuing to remain strong despite the weaker global sentiment.

Brad Watson, EY Mena Strategy and Transactions Leader, said: “Despite IPO volumes and values declining significantly in the majority of other global markets, the Mena region continues to forge its own path with a steady stream of new listings in Q3 adding to the large number of IPOs already announced across exchanges in the year-to-date. While Saudi Arabia and the United Arab Emirates make up the majority of new listings, we are also seeing increased signs of future activity in some of the smaller markets of the region - particularly Kuwait, Oman and Qatar.”

UAE sees region’s largest IPO in Q3
In the UAE, Salik Company PJSC, Dubai’s exclusive toll gate operator, raised over $1 billion, becoming the largest Mena IPO during Q3 and the fourth largest in the region in the year-to-date 2022. The IPO was oversubscribed more than 49 times across all tranches with total gross demand at $50.2 billion.

IPO activity also returned to Morocco for the first time since last year, with Disty Technologies SA, a Moroccan IT company, raising approximately $17 million on the Casablanca Stock Exchange.

Saudi Arabia leads listings activity
The Kingdom of Saudi Arabia (KSA) dominated listings activity in Q3 with two IPOs on Tadawul’s Main Market and three IPOs on the Nomu-Parallel Market, raising $490 million in proceeds. Alamar Foods Company’s public offering was the largest, with $326 million raised and the IPO order book being oversubscribed approximately 48 times.

Naqi Water Company raised $110 million and was oversubscribed over 30 times. The remaining three IPOs on the Nomu-Parallel Market saw Saudi Networkers Services Ltd, International Company for Human Resources and Naba Alsaha Medical Services Company, raised approximately $54 million in total.

Gregory Hughes, EY Mena IPO and Transaction Diligence Leader, said: “This has been another strong year for IPOs and trading activity throughout the Mena region, with investor confidence remaining high despite challenging financial headwinds across the world. As we look into Q4, we see no signs of that changing, with several prominent companies in the region having completed their IPOs.

“We are also expecting increased activity in dual listings to tap varied liquidity pools; and continued government divestment processes in the UAE, Oman and other countries, as well as movement from family businesses, which are believed to be planning market entry in different parts of the region.” – TradeArabia News Service