UAE leads continuing IPO frenzy in the GCC amid global value correction
The region experienced a 56% drop in value year-on-year while market debuts remained steady
The Middle East’s IPO boom continues, with activity holding steady after a record-breaking 2022.
Not immune to global forces, value took a big hit, however: GCC markets raised $6.8 billion through 29 offerings during the first nine months of 2023. That marked a year-on-year decline in value by 56% compared to the first nine months of 2022, when issuers raised $15.6 billion through 30 share floats, according to Markaz, the Kuwait Financial Center.
The UAE, the most active in the region for IPO activity, is catching up to the world’s biggest economy. Year-to-date, the U.S. has generated $8 billion in IPO value, while the UAE not far behind with almost $7 billion raised through IPOs.
“This is a milestone for the UAE, with its robust financial regulatory framework, ironclad anti-money laundering protection and substantial firepower from a capital perspective,” Ryan Lemand, co-founder and CEO of Neovision Wealth Management in Abu Dhabi, told The Circuit. “Strong retail investor appetite for IPOs and high retail investor-to-population ratios, help in making most IPOs successful.”
In the pipeline: Mulkia Investment Company intends to offer 20% of its capital on the Saudi Tadawul exchange this month. And the UAE is also expecting around 11 IPOs in 2023, raising upwards of $2 billion, according to Markaz.
What to watch this quarter: “As valuation gaps narrow, investors are reviewing the post-listing performance of the new cohort of IPOs, which, if positive, could renew market confidence,” according to EY.