Saudi Arabia and Egypt continue strong IPO performance in H1 2015

H1 2015 saw 11 IPOs in the Middle East and North Africa (MENA) region, raising capital of over US$2.4b, according to EY’s MENA IPO Eye – H1 2015. Deal volume decreased by 31% and proceeds raised decreased by 1% in H1 2015, compared with H1 2014. Egypt and Saudi Arabia witnessed the highest number of IPOs with five and three IPOs respectively.

Q2 2015 saw a significant increase in IPO value, with nine IPOs raising over US$2.1b, a 92% jump compared to Q2 2014. The number of IPOs decreased however by two in Q2 2015, compared with Q2 2014.

Phil Gandier, MENA Transaction Advisory Services Leader, EY, says:
“Egypt and Saudi Arabia continue to be strong IPO performers; the IPOs on Egyptian and Saudi Arabian exchanges were the primary drivers of IPO activity in MENA in H1 2015. Egypt continues to benefit from increasing political stability, improved economic conditions and various reforms, which are driving confidence in the Egyptian capital markets, attracting both companies and investors.”

Largest H1 2015 IPO in Saudi Arabia

H1 IPOs in Egypt included Integrated Diagnostics Holdings PLC, Edita Food Industries, Orascom Construction Limited and Emar Misr.

Saudi Arabia saw the listing of three companies, including the long-awaited IPO of Saudi Ground Services Company on the Saudi Stock Exchange (Tadawul), which was the largest IPO in H1 2015, raising US$751.9m, and was over twice the size of the next largest IPO during the period. The IPO is part of the continued privatization of Saudi Arabian Airlines business units.

Mayur Pau, MENA IPO Leader, EY, says:

“IPOs on the Tadawul and the Egyptian Exchange continue to attract strong demand, with offerings up to 11 times oversubscribed, highlighting positive investor sentiment in these markets in particular.”

Return of outbound London IPOs

Q2 2015 also saw the first MENA outbound IPOs since the listing of Gulf Marine Services on the London Stock Exchange (LSE) in Q1 2014. Integrated Diagnostics Holdings (healthcare diagnostic services) and Edita Foods Industries (packaged food distributor) opted for listings on the LSE, through a main market listing and listing of global depository receipts.

Integrated Diagnostics Holdings is the third MENA health care company to list on the LSE, following the successful IPOs of NMC Health (2012) and Al Noor Hospital (2013). This sector continues to be one of the most attractive sectors in the MENA region for IPOs.