IPOs in 2006 are expected to have an average size of $292 million, an increase from $248 million in 2005 when total capital raised reached $6,200 million and IPOs were on average 71 times oversubscribed. ‘This shows the appetite for IPOs but also how badly they were mispriced,’ said El-Solh.

World Trade Organisation (WTO) membership is encouraging companies in the region to raise capital through an IPO, said Maha al-Ghunaim, managing director of Kuwait’s Global Investment House. ‘There’s a need for economies of scale. Companies need to be bigger to have a presence in the market,’ she said. ‘We’re starting to see bigger and bigger deals. The culture of raising risk capital through an IPO is gathering steam.’

But Mohammed Abudawood, vice-chairman of Saudi Arabia’s Abudawood Group, said there was a need for further privatisation and some sort of mechanism to prevent too much speculation, such as a ceiling on share multiples. ‘[Accelerated] privatisation will let other people share the wealth and build a real middle class,’ he said. ‘Two million people have invested in the Saudi stock exchange. And we can’t afford the market to crash.’