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ME IPOs raise $3.9b in Q2

DUBAI — During the second quarter of 2007, 20 companies in the Middle East raised a total of $3.9 billion through initial public offerings (IPOs), according to a report by global professional services firm Ernst & Young. Eleven Saudi Arabian companies raised about $2.5 billion, followed by UAE firms, which raised $882 million. Qatari firms raised $338 million.

In 2006, $8 billion was raised through 45 IPOs in the Middle East, compared with the $4.8 billion raised through 33 offerings in the first half of this year. Globally, 531 IPOs closed during the second quarter of 2007, raising $88 billion.

Head of M&A Services, Ernst & Young Middle East, Azhar Zafar, said: "The three largest offerings in the second quarter of 2007 were Saudi Kyan Petrochemical Company's offering of $1.8 billion, followed by Deyaar Development Company's offering in the UAE of $883 million, and Saudi Arabia's Jabal Omar Development Company offer of $ 537 million. This reflected the growing capital base and confidence in the regional capital markets to date."

Omar Bitar, Ernst & Young's managing partner, business advisory solutions, Middle East, said much of the IPO activity globally was driven by emerging markets, with Brazil, Russia, India and China together raising $35 billion in 90 IPOs and accounted for four of the five largest IPOs in the second quarter.

He also said: "The Middle East is expected to continue to grow in the next few years, with many IPOs waiting in the pipeline. There is great potential for the region to increase the level of funds raised, especially as it continues to successfully experiment with allowing multiple IPOs to hit the market simultaneously."

Of the $88 billion raised during the second quarter of 2007, capital raised by companies in the US, China and Russia made up about half of the global total raising $15.7 billion, $15.5 billion and $11.7 billion respectively. In terms of the highest number of IPOs Australia led the way with 66, ahead of the US at 59 and China at 50.

Companies from the financial sector and materials industries dominated the list of top 20 IPOs in the second quarter. Financial companies raised one third of all capital raised, followed by industrials (14 per cent), real estate (12 per cent) and materials (11 per cent).