ABU DHABI/RIYADH (The Thursday Times) — The Gulf Cooperation Council (GCC) Initial Public Offering (IPO) market remained buoyant in the third quarter of 2024, generating substantial investor interest across key sectors. With total funds raised hitting $1.7 billion, the Abu Dhabi Securities Exchange (ADX) and Saudi Arabian stock markets played pivotal roles in driving this growth, bolstered by notable offerings that captured regional attention.
Abu Dhabi leads with NMDC Energy
In Q3 2024, the Abu Dhabi Securities Exchange saw the largest IPO of the quarter, with NMDC Energy successfully raising over a billion dollars for a minority stake of just under a quarter. This offering underscores Abu Dhabi’s robust position in the GCC’s equity markets, with the capital raised aimed at expanding NMDC’s energy operations and positioning the company as a regional energy leader. Investor appetite was strong, driven by the company’s solid market position and plans to leverage new funds for strategic growth and international expansion.
Saudi Arabia supports IPO market momentum
While Abu Dhabi claimed the top spot for the largest IPO, Saudi Arabia continued to underpin the region’s IPO activity with several significant offerings. The most noteworthy came from Arabian Mills for Food Products, which raised over a quarter of a billion dollars for nearly a third of its ownership. The company’s IPO reflects Saudi Arabia’s growing emphasis on diversifying its economy through food security and consumer-driven sectors. Additionally, Saudi Arabia’s IPO market saw continued activity across its various exchanges, reinforcing the Kingdom’s strategy to encourage private sector growth and increase capital market participation.
Other GCC markets remain quiet
Despite the strong performance in Abu Dhabi and Saudi Arabia, other GCC markets like Dubai, Bahrain, Oman, Kuwait, and Qatar remained relatively quiet in terms of IPO activity during Q3. This pause could be attributed to various macroeconomic factors or market conditions. However, market watchers are expecting a shift as economic indicators in these regions remain favourable, and the demand for fresh equity capital is expected to grow in the coming quarters.
Year-on-year comparison shows mixed results
When comparing year-on-year performance, the third quarter of 2024 showed a modest increase in IPO values compared to the previous year. While the overall funds raised in Q3 marked a slight increase, the cumulative IPO activity for the first nine months of the year reveals a different story. Total capital raised during the first three quarters of 2024 stood at just over $5 billion, representing a noticeable drop from the same period in the previous year. Despite this, the GCC IPO market has shown resilience, supported by the strong showing from the UAE and Saudi markets.
Promising outlook for Q4 and beyond
Looking ahead, the outlook for the fourth quarter of 2024 is promising, with several high-profile IPOs expected to come to market. Among the most anticipated is Lulu Hypermarket, which is expected to raise substantial funds next week. This IPO is predicted to set a new record for the UAE, further bolstering the region’s IPO market as companies across a range of sectors tap into public equity markets to fund growth.
Additionally, Oman saw a major IPO last week with OQ Exploration and Production raising substantial funds, signalling a possible resurgence in the country’s equity markets. Abu Dhabi National Hotels and Catering also completed a successful listing, demonstrating continued appetite for investment in the region’s hospitality sector.
Saudi Arabia’s NOMU market is set for further activity with several listings expected in the coming months, alongside new offerings in the main market, particularly in key sectors like e-commerce and food delivery, with Talabat’s anticipated IPO generating considerable interest in the Dubai Financial Market.