Strong recovery for IPO market in 2010

15 July 2010

Value of funds almost doubled year-on-year

Regional initial public offerings (IPOs) are signalling a strong recovery this year raising 84 per cent more funds during the first half compared to the same period of 2009.

IPOs generated $6.8bn through 62 issues in the first quarter of 2010, compared to $3.7bn through 29 issues in the same period in 2009.

The main driver of growth in the market has been government initiatives aimed at diversification to reduce dependence on the oil sector, says a new report by asset management firm Al-Masah Capital.

Mena IPO pipeline looks extremely healthy in 2010, with four countries expected to account for the majority of activity. The market had withered in 2009 as a result of the financial crisis, raising a mere $12.8bn from 191 IPOs, a decline of 82 per cent compared to 2008.

The UAE leads in value terms with $25.3bn worth of planned listings in 2010. Nakheel, the property arm of state-owned Dubai World, is expected to issue a $15bn IPO.

It is followed by Bahrain with $3.8bn and Saudi Arabia with $1.03bn. Meanwhile, Egypt has unveiled plans to launch two IPOs in the financial services and transportation sectors, for a total of $1bn.

Saudi Arabia has the highest number of planned IPOs in volume terms, accounting for 47 out of the total 106.

The UAE follows with 25 IPOs, mostly from the real estate sector, whereas Bahrain and Kuwait announced six and five, respectively.

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