Saudi Arabia was the most active market in the GCC region for initial public offerings (IPOs) in Q1-2016, and will likely continue show the most momentum later this year with new offerings in the pipeline, PricewaterhouseCoopers (PwC) said in a new report.
In fact, the Saudi Stock Exchange (Tadawul) was the only active market during the quarter, with Middle East Healthcare Company (MEAHCO) being the one IPO that took place in March.
MEAHCO, which owns and operates Saudi German hospitals, offered 27.61 million shares to the public (amounting to 30 percent of the company’s share capital) and raised proceeds of $471 million (SAR 1.8 billion).
IPO activity remained sluggish elsewhere in the Gulf during the first three months of the year, as oil price volatility and the global economic slowdown took a toll on equity markets.
However, the outlook for IPOs in the region for the rest of 2016 looks more promising, the consultancy firm predicted.
“IPOs put on hold in 2015 due to regional instability are expected to come back in 2016 as lower oil prices become the norm and are factored into the market,” said Steve Drake, head of PwC’s Capital Markets and Accounting Advisory Services team in the Middle East.
Saudi Arabia’s equity market, in particular, is expected to benefit from the recently announced Saudi Vision 2030 reform plans.
“The Capital Market Authority’s (CMA) desire to increase the number of Saudi Arabia listed entities on the Saudi exchange is expected to have a positive impact on IPO volumes in the medium term,” Drake added.
Write to Jerusha Sequeira at jerusha.s@argaamnews.com
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