MENA IPOs rebound as market improves

The IPO of Britain’s Bank of London and the Middle East in October was Nasdaq Dubai’s first listing in over four years

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Initial public offerings are set to be revived in the Middle East and North Africa (MENA) as conditions in the capital markets improve, according to an Ernst & Young’s report.

Although the IPO market in the region has been quiet in the past few years, a series of expected debuts could re-invigorate it. There was only one IPO in MENA in the third quarter of this year, the report noted.

Britain’s Islamic lender Bank of London and the Middle East, which listed on Nasdaq Dubai in October, was the first listing in Dubai in over four years, cited the report.

More IPOs are expected to come based on the activity which occurred in the first half, despite having only one IPO in MENA in the third quarter of 2013.

In the first half of the year, total funds raised through IPOs in the region went up 52 percent to $2.1 billion. This compared with the $1.4bn gathered in the same period in 2011.

In the past five years, the amount raised in the first six months of 2013 was the highest, primarily because of the $1.3bn IPO of Asiacell which was the Iraqi arm of Qatar telecommunications operator Ooredoo.

Ernst & Young MENA Head of Transaction Advisory Services Phil Gandier said “we do see an uptake in the number of Gulf and London IPO announcements and expect the IPO activity to increase significantly in 2014 and 2015. This potentially could be a result of the successful launch of the Al Noor Hospital IPO and other Gulf listings announced recently.”

Kuwait Telecom operator Zain’s IPO of its Iraqi unit, which is set to raise over $1bn, will be one of the bigger listings next year.

IPOs in the region will mostly focus in the UAE and Saudi Arabia, added the report.

This article was first published in the Saudi Gazette.

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