Persian Gulf IPOs: MBC, PureHealth Draw $87 Billion in Orders - Bloomberg

Persian Gulf IPOs: MBC, PureHealth Draw $87 Billion in Orders - Bloomberg

Investors’ appetite for initial public offerings in the Persian Gulf is showing no signs of fatigue, with a Middle Eastern broadcaster and a health-care firm drawing a combined $87 billion in orders for their share sales.

MBC Group, the Middle East’s biggest broadcaster, drew 54.5 billion riyals ($14.5 billion) in institutional investor orders for its $222 million Riyadh IPO — for a subscription coverage of about 66 times — it said on Tuesday. The firm has yet to take orders from retail investors, meaning the total order book will be even larger.

On the same day PureHealth Holding, which is controlled by one of Abu Dhabi’s wealth funds and its largest conglomerate, said it had attracted demand worth over 265 billion dirhams ($72 billion) for its $986 million listing in the United Arab Emirates’ capital.

Professional investors within the UAE and the region put in orders for 54 times the shares made available to them in the PureHealth IPO, while retail buyers piled in for 483 times the shares on offer, the company said.

That’s in stark contrast to the anaemic listings picture in most other parts of the world. The Middle East has been a bright spot where IPOs have continued to find willing buyers who have mostly been rewarded with solid returns once the stocks have started trading.

Companies that raised at least $50 million in Gulf IPOs this year have rallied 38% on average post debut, far outperforming the equivalent cohorts in Europe, the US and Asia, data compiled by Bloomberg show.

The region’s IPO market has boomed on the back of high oil prices, growing investor interest and government privatization programs. So far this year $9.3 billion has been raised through Middle Eastern IPOs, representing about 40% of total volumes in all of Europe, the Middle East and Africa.

To be sure, in many cases the stakes being sold are small, meaning demand far outstrips supply. In both the MBC and PureHealth IPOs, only 10% of the company is being sold.