IR Monitor Middle East – June 2022
Middle East capital markets are developing. Fast. IPOs are on track for their best ever first half, raising $11.4 billion in the first five months alone. International investors are eyeing up new opportunities with net foreign inflows across all GCC exchanges. The push to list state-owned assets continues at pace deepening local capital markets. What does this all mean for the Investor Relations profession? Its importance as a function is fast evolving as companies prioritise strong, transparent relationships with the investment community. Stay up to date with the latest trends, themes and developments with the IR Monitor Middle East edition monthly round-up.
Embracing ESG
In an op-ed for Arab News, PwC Middle East partner AbdelKhaleq Ahmad spoke about the opportunities that ESG presents the region. While debates surrounding ESG are taking a turn globally, attitudes towards the framework are becoming more favourable in the Middle East – propelled by national economic and energy transformation agendas such as those of the UAE, KSA. The author refers to PwC’s latest ESG report which revealed that as of this year, while ESG becomes more of a focus for financiers, only 34% of companies in the region had net-zero commitments, and therein lies a significant opportunity for experts to help businesses navigate this journey.
The Future(s) have arrived
As part of its strategy to diversify investment opportunities, earlier this month, the DFM launched equity futures contracts on individual stocks of two of its leading listed companies, DEWA and GFH Financial Group. The launch brings the number of listed companies that the DFM provides futures’ contracts to 12, with tenures of 1, 2 and 3 months.
Middle East IPOs galore!
According to a Bloomberg article, Initial Public Offerings (IPOs) in the Middle East are on track for their best ever first half as oil prices surge. IPOs in the Middle East have fetched $11.4 billion in the first five months of the year, already eclipsing the amount raised in any other first half, with the tally only set to increase. While share sales have plunged to a two decade-low in Europe because of inflation, rising interest rates and an uncertain economic outlook, the Middle East has attracted investors from elsewhere.
Middle East AuM hit $1.2 trillion, driven by retail investing
A recent report highlighted that the Middle East’s Assets Under Management (AuM) increased 16 per cent to $1.2 trillion, significantly above the ten-year growth average. With this, retail investors are now among the most important investor segments, making up 9 per cent of total AuM, outpacing institutional AuM as a source of capital growth during 2020-2021. Additionally, in 2022, Middle East exchanges have already shown a strong performance, indicating that investors investing in the regional markets will fare comparatively better than investing into global markets.
ADX sprints towards record-breaking year
The MD and CEO of ADX, Saeed Hamad Al Dhaheri sat down with The National and expressed his confidence in the bourse in matching, if not breaking, the record of listings it achieved in 2021. As of this interview date, the exchange’s market value was up about 25 per cent so far this year at more than US$549 billion. With 13 more listings expected this year, the UAE capital is finding issuers with the same enthusiasm as it finds oil fields.
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