IR Monitor Middle East – September 2022
While IPO activity continues to boost the region’s capital markets, MENA’s private capital deals have also increased considerably, with the region’s investment rising to USD 19bn in H1. Activity is also picking up in Egypt, with the Government targeting USD 6bn before the middle of next year – which is expected to involve further funding from the Middle East’s sovereign wealth funds in addition to other strategic investors. Elsewhere, the UAE may roll out basic ESG standards for businesses in a move to enhance sustainability measures – and Dubai is recognized as the region’s leading financial centre in the Global Financial Centres Index.
Salik CEO Discusses Market Demand
Dubai’s third IPO of the year, Salik, began its trading debut and saw its shares rise as much as 21% on its first day – before finishing the day 11% above the initial public offer price. The IPO drew $50 billion in orders earlier in the month. FTI Consulting advised on the entire communications workstream around the IPO, which received overwhelming demand, and underscored the significant interest in Middle Eastern deals despite a challenging global backdrop. The government sold a total stake worth $1 billion in the company, after investors snapped up all Salik shares on offer hours after the IPO opened, prompting a boost in the size of the offering from 20% to almost 25%. Discussing why the listing gained so much attention from investors, Ibrahim Al Haddad, CEO, of Salik told Bloomberg in a TV interview that the firm is “well-positioned to benefit” from Dubai’s 2040 master plan – and reiterated that there is global demand for Dubai’s great companies and great assets.
UAE may roll out ESG standards for all businesses
In a story published in Gulf News, a top official at DIFC says that UAE businesses could all soon have basic ESG benchmarks to comply with – rather than leave it to businesses to decide how to make their contribution to sustainability. “Globally, there are about 1,100 ESG-related standards,” said Christian Kunz, Head of Group Strategy and Innovation at Dubai International Financial Centre. “So, rather than the UAE adopt all these benchmarks, the focus could be on a few of them – say, 10 – making up the national benchmark.” This would boost the UAE’s own path to Net Zero on carbon emissions by 2050.
MENA private capital deals in H1 reach 214, worth USD 19bn
Private capital deals in the Middle East and North Africa have increased from 48 in H2 2018 to 214 in H1 2022, driven by tech-enabled and digital platforms, with investment rising from $5.2 billion to $19 billion, according to the 2022 Mena Data Insight report from the Global Private Capital Association (GPCA). Sovereign Wealth Funds (SWF) assets in the region are growing, driven by the energy crisis – which are being deployed in tech companies and start-ups in MENA and other global private capital markets.
Dubai ranks as regional first, 17th globally in Global Financial Centres Index
In an Index compiled by Think Tanks, Z/Yen Partners and the China Development Institute, which ranks 119 global financial centres, Dubai reigned ‘supreme’ in the Middle East, and was ranked in 17th place of the Global Financial Centres Index by Bloomberg. The index uses data from thousands of financial services professionals who responded to an online questionnaire. Dubai also climbed to Number 9 in the ‘Future Prospects’ list, in which the GFCI questionnaire asks respondents which centers they consider will become more significant over the next two to three years.
Capital market activity in Egypt picks up pace
Capital markets activity in Egypt gained momentum this month – with indications that the Egyptian government were preparing to relaunch its initial public offerings (IPOs) program. This has since been subsequently followed by recent news from Bloomberg, that Egypt is looking to secure USD 6 Billion in funding from the sale of state firms before the middle of next year. The funding is expected to come from more Sovereign Wealth Funds around the region, with future roadshows already being planned. The latest target follows after Abu Dhabi Developmental Holding Company (ADQ) and the Public Investment Fund (PIF) both pumped roughly USD 3 billion into Egypt.
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