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UAE to sustain lead in GCC’s Q4 IPO proceeds

The UAE and Saudi Arabia raised a combined $1.7 billion, a 6% increase from the previous year

The UAE, which led the GCC region in third quarter IPO activity followed by Saudi Arabia, will sustain the dominance in 2024 with the upcoming $1.8 billion initial public offering.

In the third quarter, the UAE dominated the region with $1.1 billion in IPO proceeds from the listing of NMDC Energy, accounting for 69 per cent of the total raised across the GCC through seven IPOs.

Saudi Arabia followed with $512 million from its IPOs in the third quarter, contributing 31 per cent to the overall regional total, according to data provided by the Kuwait Financial Center, also known as Markaz.

The UAE and Saudi Arabia raised a combined $1.7 billion, a 6.0 per cent increase from the previous year, an analysis showed.

The GCC region has emerged as a hotspot for IPOs in recent years, fuelled by robust economic reforms, diversification efforts away from oil dependence, and growing interest from both regional and international investors. In the first nine months of 2024, GCC issuers raised $5.2 billion from 30 offerings, compared to $6.8 billion from 29 offerings during the same period the previous year.

Sector-wise, the energy industry led the way, with Abu Dhabi-based construction company NMDC Energy’s $1.1 billion IPO on the ADX representing 69 percent of the region’s total proceeds for the third quarter.

In Saudi Arabia, the food and beverage sector saw wheat milling company Arabian Mills for Food Products raise $271 million, accounting for 16 percent of the quarter’s proceeds.

Markaz's report comes as Lulu Retail Holdings, which runs one of the Middle East’s biggest hypermarket chains, announced its plan to float 2.58 billion shares, representing 25 per cent of the company’s capital, on the Abu Dhabi Securities Exchange.

The UAE and Saudi Arabia have intensified privatisation and diversification initiatives in sectors such as health care, technology, and renewable energy, making their market increasingly attractive.

Saudi Arabia’s Tadawul saw a total of $459 million and $53 million listed in the third quarter on its main market and Nomu-parallel market, respectively, together constituting 31 percent of the total GCC IPO proceeds. Other exchanges in the GCC have not seen any listings during the quarter, said Markaz.

In the third quarter, the energy sector accounted for nearly 69 per cent of the total proceeds through one offering amounting to a total of $1.1 billion in proceeds. The F&B sector raised around $271 million, a 16 per cent share of total GCC IPO proceeds, while the consumer cyclical sector constituted 11 percent of total proceeds, amounting to $188 million. The commercial and professional services sector saw three IPOs constituting 3 percent of the total proceeds at $44 million while the materials sector saw one IPO amounting to $9 million and constituting 1.0 per cent of the total GCC IPO proceeds during the third quarter of the year.

The seven IPOs that the GCC region witnessed in the 3rd quarter included NMDC Energy (23 per cent stake for a total of $1.1 billion), Arabian Mills for Food Products (30 per cent stake for a total of $271 million), Al Majed for Oud (30 per cent stake for $188 million), First Avenue Real Estate Development Company (8.0 per cent stake for $26.3 million), Al Tharwa Al Shariyyah Company (15 per cent stake for $11.7 million),

ASG Plastic Factory Company ((20 per cent stake for $8.8 million), and Al Ashghal Almoysra Company (20 per cent stake for a total of $6.4 million).