The UAE initial public offering (IPO) market is showing signs of recovery. There were only four IPOs in the first half of this year, down 50 per cent since the same period in 2010. The value of the deals went down 57 per cent from $830m to $358m.
According to analysts, this is because of investor caution due to the economic uncertainty across the world.
The Saudi Arabian Stock Exchange (Tadawul) dominated IPO activity in the GCC last year, but this year the UAE bourses have been most active with three of the four IPOs listed in the UAE and accounted for 74 per cent of the total capital raised.
The fully-subscribed Eshraq Properties Company IPO on the Abu Dhabi Securities Market raised $225m, 63 per cent of the total amount raised in the GCC.
Insurance House raised $28m and Wataniya, which also listed in the UAE raised $22m.
The fourth IPO was Saudi Integrated Telecom Company’s listing on the Tadawul, which raised $93m.
“We believe there is pent up demand for IPO capital in the market. However, realistic pricing and a strong growth story are crucial to draw investor interest and market demand,” says Steve Drake, head of capital markets at consultancy Pricewaterhousecoopers Middle East.