New report on GCC IPO market in 2015

New report on GCC IPO market in 2015

There were only six IPOs in the GCC during 2015, raising $1.48bn between them, according to a new report by Kamco, the Kuwaiti investment company.

Four of the IPOs were for Saudi companies, one was for a Kuwaiti company and one for an Omani company (see below). All except one occurred in the first half of 2015.

In contast, there were 17 IPOs in 2014, raising a total of $10.9bn. Kamco attributes the slowdown to "the negative sentiment prevalent in the market from falling oil prices, growing geopolitical concerns, and broader economic uncertainty." The company also recognises that Eid and the summer holidays contributed to the lack of issues in the second half.

IPO activity was on a generally upward trend from 2003 until 2008, when 35 issues raised $10.9bn. There was then a sharp decline until 2014 when 17 issuances raised $10.9bn. (The value of IPOs in 2014 was helped by the huge capital raising exercise by National Commercial Bank of Saudi Arabia, which alone raised $6 bn.)

The Kamco report notes that there were 191 IPOs in the GCC from 2001 - 2015. Saudi Arabia accounted for 104 of these, the UAE 30, Oman 22, Kuwait and Qatar 14 each and Bahrain 7.

The six IPOs during 2014 were:

  • Saudi Ground Services Company
  • Phoenix Power Company (Oman)
  • Saudi Company for Hardware
  • Middle East Paper Company (Saudi Arabia)
  • Mezzan (Food and Beverage, Kuwait)
  • Al-Andulus Real Estate Company (Saudi Arabia)

The Kamco report says that Mezzan shares have risen by 57% since listing, Saudi Hardware by 42% and Phoenix by 31%, despite their benchmark indexes falling.  Middle East Paper and Saudi Ground Services have fallen since listing (but not by as much as their benchmarks) and Al-Adulalus, which closed at the end of 2015, has yet to list.

The full report is three pages long and easy to read. It can be accessed here.

To read about the performance of GCC stock markets as a whole during 2015 click here.