GCC sees four IPOs in 2017 - Report

GCC sees four IPOs in 2017 - Report
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Mubasher: The third quarter of 2017 witnessed a total of four IPOs in the Gulf Cooperation Council (GCC) region, slightly increasing compared to the previous quarter, according to a recent report by PricewaterhouseCoopers (PWC).

Proceeds raised from Q3-17 IPOs amounted to $140 million, lower by $31 million compared to Q2-17 $171 million.

“GCC IPO market activity this quarter gained momentum representing a general improvement in market conditions and investor confidence in the region. We are seeing more and more companies engaging in IPO readiness activities, preparing themselves and getting ready for the right window. We expect to see companies go to market during 2018,” said the head of PwC’s Capital Markets and Accounting Advisory Services in the Middle East, Steve Drake.

Tadawul remained the dominant exchange in the GCC in terms of IPO proceeds, raising $110 million via two IPOs, comprising 79% of total IPO proceeds in Q3-17.

The largest IPO during the quarter was by Zahrat Al Waha Trading raising $61.2 million.

Muscat securities Market (MSM) witnessed its first IPOs since June 2015, raising $30 million via two IPOs, comprising 21% of total IPO proceeds in Q3-17.

Another strong display by the GCC debt issuers, as investors’ appetite for sovereign issuances remained relatively high, with KSA and Bahrain amongst key sovereign issuers.

KSA domestic Sukuk programme included three tranches, a SAR 16.525 billion five year tranche, a SAR 14.475 billion seven year tranche and a SAR 6.0 billion 10 year tranche.

Bahrain raised a total of $3 billion, via a $2.15 billion international bond and $850 million international sukuk.

DAE Funding, a wholly-owned subsidiary of Dubai Aerospace Enterprise (DAE), successfully issued a total $2.3 billion bond, which were split into three tranches, $500 million yielding 4% and maturing in 2020, $800 million yielding 4.5% and maturing in 2022, and $1 billion yielding 5% and maturing in 2024.

“GCC governments continue to tap into both domestic and international debt markets, bolstering their budgets amid prolonged low oil prices. We are set  for a busy end of the year, with both KSA and UAE governments expected to tap the debt market with their international bond sale of  $12.5 billion and $10 billion, respectively,” added Drake.