It’s been another dismal year for initial public offerings globally, but the Middle East has shone as a hive of listing activity which is expected to stretch into 2024.
Over the past two years, the energy-rich region has emerged as a busy IPO market, as governments intent on weaning their economies off reliance on oil have sold stakes in state-owned firms while crude prices have been high. Russia’s exclusion from the MSCI Emerging Markets index after its invasion of Ukraine last year, and China’s slowdown in economic growth, have prompted investors to look at the Persian Gulf.
While listings in the region have raised less than half the amount they did last year, at $10.5 billion it’s still set to be the third-best year since 2007 for IPO proceeds, data compiled by Bloomberg show. The Gulf accounts for about 45% of total IPO volumes in Europe, the Middle East and Africa this year, compared with 51% in 2022.
Bankers aren’t expecting the IPO flow in the Middle East and North Africa to slow anytime soon, as the tailwinds of strong growth, government reforms and investor demand remain.
“The outlook is very strong for MENA IPOs in 2024,” said Christian Cabanne, Bank of America Corp.’s head of equity capital markets in Central and Eastern Europe, the Middle East and Africa. “Maybe the difference between 2023 and 2024 is that in 2024 we expect to see more private companies come to market, including in the United Arab Emirates.”
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