The Middle East and North African IPO market is expected to experience strong activity in the second half of 2024, with 16 private companies and seven funds from various sectors planning to list on regional exchanges. Following a resilient first half dominated by the UAE and Saudi Arabia, the forthcoming IPOs are anticipated to be boosted by the region's ongoing privatization efforts, increased liquidity, economic recovery, and positive market sentiment, according to market experts. The first half of 2024 saw a 45.3 percent increase in IPOs that raised $2.64 billion.
An Ernst & Young report on IPO activity in the Mena region highlighted that out of the 16 companies planning to list in the coming months, 14 are in Saudi Arabia, including Riyad Capital, United International Holding Co., and Arabian Mills for Food Products. Additionally, one company in the UAE and Go Bus in Egypt have received approval to list. The report emphasized a continued focus on economic diversification away from oil and gas, with listings from sectors such as healthcare, education, consumer goods, and professional services.
Gregory Hughes, EY Mena IPO leader, noted that the Mena IPO market is primarily driven by the KSA and the UAE, with Kuwait Boursa welcoming its first listing since 2019. The second quarter of this year featured significant listings, including Dr Soliman Abdul Kader Fakeeh Hospital Co on Saudi Arabia's main market, raising $764 million, and Alef Education Consultancy on Abu Dhabi Securities Exchange, contributing $515 million. The listing of Spinneys 1961 Holding Plc on the Dubai Financial Market raised $375 million.
Saudi IPOs raised $1.6 billion during the quarter, with Saudi Manpower Solutions Company and Rasan Information Technology Company among the top performers. Boursa Kuwait saw its first listing since 2019 with Beyout Investment Group raising $147 million. E&Y reported that increased liquidity due to higher oil prices, economic recovery, and positive market sentiment has maintained buoyant IPO activity in the region, with a robust pipeline for H2 2024.
Eight out of the 14 Mena IPOs listed in Q2 2024 showed positive returns as of 30 June 2024, with Miahona Company achieving the highest gain of 90.4 percent. Stock exchanges across the region performed variably, with the MSCI Emerging Markets Index leading with a 4.2 percent gain in Q2 2024. Globally, IPO activity decreased by 15 percent from Q2 2023, with proceeds down by 31 percent. Fitch Ratings indicated that the sale of minority stakes by government-linked entities and the establishment of public subscription funds will accelerate IPOs in the region this year.
