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The Middle East and North Africa region will see a record number of IPOs in 2022, with 51 IPOs and total proceeds of $22 billion, professional services firm Ernst & Young said in a new report.
According to the EY Mena IPO Eye Q4 2022 report, the number of listings this year has increased by 143% compared to the 21 announced in 2021, and the value has increased by 179% compared to last year.
The strong performance of MENA markets included 20 IPOs in Q4 2022, raising $7.3 billion in funding. Q2 2022 was the strongest quarter in terms of value, with nine IPOs raising $9.2 billion.
Brad Watson, Head of Strategy and Transactions at EY Mena, said: “Mena IPOs are doing well in 2022, with interest and liquidity in the region continuing to run counter to global trends. Q4 2022 saw the highest number of IPOs at 20; however, as Dubai Electricity and Water Authority’s (Dewa) listing on the Dubai Financial Market (DFM) saw record capital raised in the second quarter at a record $6.1 billion. The year to watch will be 2023, as it faces challenges and turbulence Against the backdrop of the current global economic environment, there is a healthy pipeline of IPOs across the region.”
Globally, 1,333 IPOs raised $179.5 billion in 2022, a year-over-year decline of 45% in volume and 61% in value. In stark contrast to a record-setting 2021, IPO activity hit long-term lows in both volume and value across multiple regions, with the Americas seeing the strongest decline.
However, the MENA region continues to buck the trend, with listings remaining strong through the end of 2022, with a positive outlook for 2023. Several companies have announced their IPO plans for the new year.
The performance of MENA equities has been volatile throughout 2022 as rising interest rates, inflation and geopolitical turmoil weigh on investor sentiment. By year-end, 24 of the region’s 51 IPOs had negative returns relative to their IPO prices.
Saudi Arabia witnesses rising number of listings
The Kingdom of Saudi Arabia (KSA) continues to dominate listing activity in the fourth quarter of 2022. These include seven IPOs on the main market of the Saudi Stock Exchange (Tadawul) raising proceeds of $4.7 billion, six IPOs raising $65.2 million, and two direct listings of Nomu – the parallel market. The largest public offering belonged to Saudi Aramco Base Oil Company (Luberef), which raised $1.3 billion — that amount alone is more than the total value of Saudi listings in the third quarter of 2022.
Meanwhile, Americana Restaurants International PLC (Americana) conducted its first dual offering and simultaneous IPO on the Abu Dhabi Securities Exchange (ADX) and Tadawul. In total, the company provided a 30% stake to raise $1.8 billion.
UAE set for largest Mena IPO in Q2 2022
In the UAE, Dewa raised $6.1 billion in the second quarter of 2022, making it the largest Mena IPO to raise funds this year.
In the fourth quarter of 2022, ADX welcomed three listed companies – Americana, Burjeel Holdings PLC and Bayanat AI PLC, raising a total of US$14 billion. In addition, DFM has two new listings – Emirates Central Cooling Systems Corporation (Empower), which raised US$724.1 million, and Taaleem Holdings PSC, which raised US$204.2 million.
IPO activity is on the rise across the region
Despite lower IPO numbers and trading volumes, the Egyptian Exchange (EGX) outperformed the largest GCC markets – Tadawul and ADX – in 2022 with an annual growth rate of 22.2%.
The fourth quarter of 2022 saw an increase in IPO activity across the MENA region, with Oman, Morocco and Tunisia seeing decreases in IPO activity. Pearl REIF’s IPO raised $60.7 million on Muscat Stock Exchange (MSX), Akdital Holding SA raised $75.6 million on Casablanca Stock Exchange, Assurances Maghrebia Vie SA on Tunis Stock Exchange Raised $14.6 million.
Gregory Hughes, Head of IPO and Deal Due Diligence at EY Mena, said: “2022 is a record year for Mena IPOs, with total proceeds raised from state and private companies up 179% year-on-year. Together with the first regional dual listing and simultaneous IPO, it announced cooperation with regional and international exchanges, and a harmonized set of ESG disclosure indicators developed by the GCC Exchange Committee.
“The question remains whether the global economic outlook and lower GDP forecasts for the MENA region will affect expected listings in 2023, despite the abundance of government-backed private company IPOs.” – trade arab news agency
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