IR Monitor Middle East – November 2022
Over the past month, the GCC saw a number of successful IPOs particularly in the UAE and Saudi Arabia, among them the dual-listing of Americana which raised over USD 1.8 billion, and UAE’s Empower, which FTI Consulting advised on, successfully raising over USD 724 million. According to Citigroup and Goldman Sachs, it is likely that 2023 will witness an IPO boom in the Middle East as more family-owned companies, as well as tech and tech-enabled firms are likely to come to the market. At a time when primary capital market activity remains muted in global markets, the GCC economies continue to go against the odds, partly as a result of the support of regional sovereign wealth funds.
Americana raises USD 1.8 billion from IPO
The Public Investment Fund and Mohamed Alabbar sold 2.5 billion shares in Americana Restaurants International at SAR 2.68 each, or Dhs 2.62, the top of a marketed range, according to a statement on Thursday. The shares had been offered at SAR 2.55 to SAR 2.68 each, or Dhs 2.50 to Dhs 2.62 a piece. The final pricing values the business at SAR 22.6 billion (USD 6 billion). The listing drew orders of USD 105 billion, continuing a trend whereby share sales in the Middle East have been massively oversubscribed.
Saudi Aramco’s Luberef receives regulatory approval for its IPO
Aramco’s base oil subsidiary, Luberef, has won approval from the Kingdom’s stock market regulator, Capital Market Authority, to launch its IPO and list its shares on Tadawul stock exchange. Luberef will sell 50 million shares, or 29.7% of the company’s issued share capital the company said in a statement on Sunday. The final pricing of the offer shares will be determined at the end of the book-building period.
Empower shares surge on listing debut after $724 million IPO
Shares of Emirates Central Cooling Systems Corporation, known as Empower, surged as much as 9 per cent above the company’s listing price as it made its debut on the Dubai Financial Market. The world’s largest district cooling provider is the fourth initial public offering (‘IPO’) in Dubai this year and raised more than $724 million from its offering, which attracted strong demand from local, regional and international investors and was more than 47 times oversubscribed. The UAE Strategic Investment Fund, Shamal Holding and the Abu Dhabi Pension Fund were cornerstone investors in the IPO.
UAE’s International Holding Company plans health and Technology IPOs
International Holding Company plans to sell 20% of its technology unit in an initial public offering next year. It is also aiming to raise more than USD 1 billion in an IPO for Pure Health in the first quarter of 2023. IHC, which completed four IPOs this year and plans a similar number in 2023, has yet to appoint banks for the Pure Health IPO, and is considering a possible 2023 IPO of International Energy Holding.
Sovereign wealth funds guiding the Middle East through the global economic crisis
Amidst dampening global macroeconomic trends, the Middle East’s capital markets continue to shine supported amply by high oil prices, strong demand and investor inflows. A very strong push has come from the region’s strongly placed sovereign wealth funds (‘SWF’). Of the $11.2 trillion in assets that SWFs are estimated to manage worldwide, more than a third hails from the Middle East region. The Gulf alone houses 18 sovereign investors that manage $3.7tn in financial capital and 7,500 personnel in human capital.
Citigroup echoes Goldman Sachs Group in predicting continued IPO boom in Middle East
Speaking to Bloomberg, Miguel Azevedo, the bank’s head of investment banking in the region, joined Goldman Sachs Group Inc. in predicting that the Persian Gulf’s boom in initial public offerings is far from over. More family-owned companies, as well as tech and tech-enabled firms, are likely to come to the market in 2023, rather than the stream of government-owned entities that have sold shares this year, according to Azevedo. Citigroup ranks fourth after Goldman Sachs, HSBC Holdings Plc and EFG Hermes among banks that have worked on the most listings in the Persian Gulf this year, according to data compiled by Bloomberg.
Contact Us
To be added to the distribution list for our IR Monitor Middle East Edition, or for further information from our dedicated team, please contact [email protected].
| The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
©2022 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com |
