PwC Middle East’s latest IPO report highlights that 13 IPOs raised a total of $2.6 billion in the Gulf region during Q2 2024, compared to $1.8 billion raised by the same number of IPOs in the same period in 2023. Notable IPOs in the quarter included Dr. Sulaiman Abdulkader Fakeeh Hospital, which raised $763 million on the Tadawul, as well as Alef Education and Spinneys, which are among the largest IPOs in the UAE.
Gulf indicators
GCC indices generally followed the trend in oil prices, which led to significant declines at the end of June 2024. This decline was reflected in the S&P GCC Composite Index, which declined by 4.2% at the end of June 2024 compared to its level at the beginning of the year. However, the overall momentum witnessed by GCC equity markets remained broadly stable at the high levels reached in the corresponding quarter of last year. Saudi Arabia led the IPO activity in the GCC region, raising $1.6 billion or 61% of the total IPO activity recorded in the region in Q2 2024. Furthermore, the secondary market performance was generally positive in IPOs in Q2 2024, with IPOs gaining an average of 43% in Q2 2024.
Fluctuations
“We have seen some volatility in the first half of 2024 in the performance of GCC equity indices and oil prices. However, the number of new IPOs in the GCC has maintained its momentum, with Saudi Arabia continuing to dominate the IPO market, with 19 IPOs in the first half of this year compared to 17 in the first half of 2023,” said Mohammed Hassan, Partner, Capital Markets Leader, PwC Middle East.
Sector diversity
The report indicated that IPO activity was notable across a variety of sectors during the quarter, including healthcare ($774 million), consumer markets ($530 million), financial services ($256 million), energy, utilities and resources ($148 million), industrial, manufacturing and automotive ($407 million), and technology, media and telecommunications ($515 million). This quarter also witnessed the first IPO on the Kuwait Stock Exchange since 2020, in which Beyout Investment Group Holding Company raised $147 million.
This is in addition to the large number of sukuk issuances during the quarter, which raised more than $10 billion compared to $2.6 billion in the same period last year, indicating a strong demand for Shariah-compliant financial products. More than a third of the sukuk were issued on the Tadawul exchange, while 67% of bonds and sukuk were issued by governments in the region.
Next stage
Looking ahead, the GCC IPO market outlook is expected to remain positive with strong issuances expected for the remainder of 2024, subject to the geopolitical conditions in the region in general and oil prices.