UAE, GCC IPO plans to remain strong in near future: Study – News

The IPO also helps provide another revenue stream for the government

Dubai financial market. The total value of UAE IPOs in 2022 is higher than in any year prior to 2008. – KT file

Initial public offering (IPO) markets in the UAE and the GCC have boomed post-pandemic and will remain strong as more public and private sector companies follow the path in the near future, analysts say.

Led by the UAE and Saudi Arabia, the Gulf countries have seen a flurry of IPO activity over the past few years, with public and private sector entities raising billions of dollars. In 2022 alone, 12 companies in the UAE raised US$11 billion (AED40.4 billion).

The total value of UAE IPOs in 2022 will be higher than in any year prior to 2008, according to S&P Global Market Intelligence.

“The IPO boom in the UAE will continue in 2023 due to strong investor demand. Dubai Electricity and Water Authority’s (Dewa) listing in March was the largest GCC IPO in 2022, raising $6.1 billion. Meanwhile, state-owned companies Salik, Empower and Tecom raised a combined $2.2 billion in June, September and November, respectively. All of which point to a shift in mindset, according to a report by Mashreq Bank and Meed called Drivers of Change. Specific changes.

The Dubai government has announced that it will list 10 entities on the Dubai Financial Market (DFM), increasing the exchange’s market capitalization to AED3 trillion.

Mohamed Khalifa Al Hadari, deputy chief executive of the Securities and Commodities Authority, said about 11 companies wanted to list on the Abu Dhabi Stock Exchange, including some operating in the free zone this year.

Abu Dhabi-based government-owned Adnoc Group has so far listed some of its entities on the capital stock exchange in a bid to attract more foreign investors to the stock market.

The string of initial public offerings also helps provide another source of revenue for the government.

“The IPO program is likely to continue beyond the end of the year as the UAE has a list of investment-grade institutions looking to tap a growing pool of local and regional capital with the goal of creating state-owned entities that are more efficient and more diverse in funding sources,” Mashreq Bank reports.

The study further added that there are currently more IPO opportunities in the Middle East than most regions of the world.

For the GCC region, 2022 is the best year since 2019 in terms of IPO volume and proceeds.

“The momentum in IPO activity is expected to continue into the near future on the back of a strong regional pipeline in both the public and private sectors and heightened investor awareness of the region’s potential,” it said.