The latest Ernst and Young’s (EY) IPO Eye report, released on Wednesday, showed that $349.9m was raised in the Middle East and North Africa (MENA) through four IPOs during the third quarter (Q3) of 2018.
EY said that the IPO value increased year-over-year by 21.9%, compared to Q3 of 2017, while the IPO activity declined by 33.3%.
Egypt and Tunisia recorded one deal each. The IPO of Cairo for Investment & Real Estate Development Company raised $69.7m. The IPO programme laid out by the Egyptian government, which plans to list public sector companies on its stock exchange, has strengthened the prospects of future IPOs in the country that would promote local and foreign capital inflows. Egypt also has plans to introduce an IPO programme offering minority stakes of state-owned and private companies in various sectors, in the next three to five years.
The Tunis Stock Exchange saw the IPO of Tunisie Valeurs in Q3 2018 raising $7.6m, following a year-long gap of no activity. The improved classification of Tunisia by the FTSE Russell and MSCI, along with the World Federation of Exchanges (WFE) member status, received in October 2018, has reinforced the attraction of Tunisia for foreign investment.
According to the report, Saudi Arabia led the MENA IPO activity in Q3 with the IPO of Leejam Sports Company on the Saudi Stock Exchange, which raised $220.6m, making it the biggest IPO in the Q3. In the previous quarter, four companies went public, three of which were REIT listings on the Tadawul.
Furthermore, Oman’s Muscat Securities Market (MSM) had a single IPO listing for Dhofar Generating Company in the power and utilities sector raising $52.0m.
“It is positive to see that IPO value increased year-over-year in Q3, especially when we have seen several entities across MENA delaying their plans for IPOs in 2018 due to various factors including (but not limited to) regulatory and global trade concerns and uncertain market conditions in a rising interest rate environment,” Phil Gandier, MENA Transactions Leader at EY, said.