MENA IPOs Raise US$843.9Mn In 2011: Ernst & Young #Sharjah

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MENA IPOs Raise US$843.9Mn In 2011: Ernst & Young

Regional capital markets raised US$843.9mn in 2011 as compared to US$2.8bn in 2010, a decline of 69.3 per cent. The year is closing with IPO funds worth US$226.1mn being raised in the fourth quarter, a decline of 83.5 per cent from US$1.4bn raised in Q4’10, according to Ernst & Young’s year-end MENA IPO update.

Commenting on the overall performance of the capital markets in 2011, Phil Gandier, MENA Head of Transaction Advisory Services, Ernst & Young, says: "Companies chose other fundraising routes over IPOs in 2011, which was another year of low capital market activity. Low investor interest continued in the MENA region as companies chose Islamic funding such as Sukuk, which saw a record year, as the preferred route for fundraising." He added: "Investors and issuers in the region remain concerned over the volatility of capital markets and this will likely continue in the next quarter. However, the number of announced IPOs continues to grow across the region. The moment economic conditions and investor sentiment improves, we could see a flood of IPOs in the regional bourses." Four IPOs in Q4’11 United Electronic Company in Saudi Arabia was the largest IPO in Q4’11 with US$105.6Mn, followed by SMN Power Holding in Oman with US$63.9Mn, Saudi Enaya Cooperative Insurance Company in Saudi Arabia with US$42.7Mn and Jet ALU MAROC in Morocco with US$13.9Mn.

Regional IPO performance in 2011 The largest IPO of 2011 in MENA was UAE’s Eshraq Properties Company (US$229.1Mn) followed by Saudi Arabia’s Hail Cement Company (US$130.5Mn) and the United Electronic Company (US$105.6Mn).

Saudi Arabia led the country standings in 2011, raising US$460.5Mn through IPOs in all of 2011, followed by the UAE with US$271.3Mn and Oman with US$63.9Mn. Morocco, Tunisia, Jordan and Syria were the only other MENA countries with IPO activity in 2011.

In all of 2011, five IPOs each were seen in both the Industrial Manufacturing and Financial sectors, two in the Telecommunications sector and one IPO in each of the Power and Utilities, Real Estate and Retail sectors.