IR Monitor Middle East – October 2022
According to the EY MENA IPO Eye 3Q22 report, the region has witnessed a 288% year-on-year increase in the number of companies listing, raising US$14.7bn in total – up 550% on the same period last year. In other news, BNY Mellon expects its Middle East business to grow a “healthy single digit or more” over the next five years buoyed by increased investment flows and the Future Investment Initiative, widely known as ‘Davos in the Desert’, drew to a close in Riyadh. One of the many highlights was PIF’s announcement of a successful auction of 1.4m tons of carbon credits, the largest ever sale. Voluntary Carbon Markets are a key theme to watch in global green finance.
Seven MENA IPOs raised US$1.5b in Q3 2022
MENA remains the global IPO bright spot. In the year so far, the region accounts for 31 of the 992 IPOs globally. Saudi Arabia leads by volume and the UAE by size. While Saudi Arabia and the UAE make up the majority of new listings, Kuwait, Oman and Qatar are showing signs of future activity. IPO activity has also returned to Morocco for the first time since last year.
BNY Mellon expects Middle East business to grow despite headwinds
Hani Kablawi, Chairman of BNY Mellon’s international operations, told The National that he expects its Middle East business to grow a “healthy single digit or more” buoyed by increased investment flows. “It is a region that receives a significant amount of management’s attention and time at BNY Mellon — and management attention and time does translate into capital allocation and resource commitment to the region,” Kablawi said.
Future Investment Initiative 25-27 Oct
Pessimism about the state of the world had been front and centre as leaders of global finance gathered in Saudi Arabia for the conclusion of the FII summit last week, but the host nation was a striking exception, according to Bloomberg. The Kingdom is enjoying its moment, with oil money gushing in to drive the fastest growth rate in the Group of 20 major economies, and a sense – tangible in the hallways of the Ritz-Carlton Hotel in Riyadh — that Saudi Arabia is in the ascendant. On Thursday, Saudi National Bank announced it was taking a 9.9% stake in Credit Suisse. “If you want to define the perfect storm,” said John Studzinski, vice chairman of California pension giant Pimco, “we’ve arrived.”
Kingdom’s sovereign wealth fund launches Regional Voluntary Carbon Market
On 24 Oct — the eve of FII – the Public Investment Fund announced the establishment of the Regional Voluntary Carbon Market Company, where PIF holds an 80% stake and Saudi Tadawul Group the remaining 20%. The company will offer guidance and resourcing to support businesses and industry in the region as they play their part in the global transition to net zero, ensuring that carbon credit purchases go above and beyond meaningful emission reductions in value chains. On 26 Oct PIF announced the successful auction of 1.4m tons of carbon credits, in the largest-ever carbon credit sale. The VCM initiative is a continuation of PIF’s efforts to support Saudi Arabia’s green agenda and follows the successful completion of its USD3bn inaugural green bond, and the various renewable projects PIF is spearheading as part of its commitment to develop 70% of Saudi Arabia’s renewable energy capacity, in line with Vision 2030.
MENA M&A activity totalled US$69.7bln in the first nine months of 2022
According to Refinitiv, MENA M&A transactions totalled US$69.7bn in the first nine months of 2022. Fees totalled US$186.4m during the third quarter of 2022, the lowest quarterly total in the region in six years. Despite the decline in value, the number of deals announced increased 5% from last year to the highest first nine-month total since 1980.
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