Initial public offerings (IPOs) in the Middle East and North Africa (Mena) region will not pick up until 2016, according to Mayur Pau, partner and IPO leader at London-based EY, speaking at the Arab IPO Summit in Dubai.

Market volatility, driven by the fall in oil prices, is leading companies to delay listing plans.

“Markets started fluctuating at the end of 2014 and wiped out a lot of that year’s gains,” said Pau. “2015 has seen minimal activity although there was an uptick in quarter two in Egypt and Saudi Arabia.”

EY recorded 11 IPOs in the Mena region the first half of 2015 worth $2.4bn, compared with IPOs worth $11.5bn throughout 2014. Outbound IPO activity, where local companies list on Western markets, had fallen in 2014, but returned as GCC markets became less attractive.

Pau does not expect activity to pick up until 2016, as the only market with positive sentiment is Egypt.

“Government spending forecasts have declined significantly, which will also filter through to the market and a lot of companies are deferring their IPOs,” said Pau. “The regulatory changes to markets in Saudi Arabia and the UAE are positive, but the impact has not been felt yet. This will filter through in the fourth quarter and early 2016.”

Saudi Arabia opened up its stock exchange, the Tadawul, to qualified foreign investors in June 2014, which should bring in institutional investors and boost liquidity.

The new UAE companies law has reduced the free float requirements from 55 per cent of shares to 30 per cent on the Dubai Financial Market and Abu Dhabi Securities Exchange. It will set out new, higher standards on corporate governance.

“The rules on corporate governance will raise standards and bring them in line with international standards,” said Pau. “Other exchanges may have similar plans but they have not been announced.”

The biggest challenge for companies is to choose the right time to list to maximise the amount of capital raised. Preparing for an IPO takes between one and two years.

“Everyone wanted to do IPOs in 2014, but they weren’t ready,” said Pau. “If they had been prepared they could have joined the trend, but the windows of opportunity are short.”