Gulf IPO outlook hinges on oil prices, secondary markets: Kamco

Gulf IPO outlook hinges on oil prices, secondary markets: Kamco:

The outlook for initial public offerings (IPO) in the Gulf Co-operation Council (GCC) this year will depend on secondary equity markets and oil price stability, even as the GCC sovereigns continue to propel the non-oil economy by largely maintaining their budget spending, according to Kamco Research.

"The issuers are likely to watch the development of secondary markets early on in 2019, and also ascertain whether taking the debt market route for capital needs would be viable," Kamco said in a report.

The REIT (real estate investment trusts) IPO volumes are likely to come down over structural issues affecting fundamental demand for real estate, and declining spreads between returns of REITs and deposit rates for safer time deposits going forward, it said.
"Nevertheless, we believe that companies from the GCC with unique business models, industry classification and ability to show capital efficiency should continue to garner increased interest from both the local and international investors looking at IPO participation," it added.