Four Saudi Arabian companies went public in the first five months of 2012, boosting the value of deal activity and helping a fund that targets Saudi IPOs gain 42%, says Zawya.
the start of 2012 did not show a big difference in initial public offering (IPO) activity from last year, both periods witnessing seven IPOs in the first five months; however, the increase in values from $383 million to $837 million comes as an indicator that the market might be picking up.
Last year, the IPO market was diversified in terms of geography, as five countries in the region witnessed seven IPOs, three of them listing on the Abu Dhabi stock exchange, and the rest on the Saudi, Tunis, and Amman exchanges. The only exception was the Syrian Diab Exchange Company, which has not yet been listed due to the country’s political situation. In 2012, IPOs were issued in three countries. Saudi Arabia took the lead with four IPOs, three of which listed on the Tadawul exchange. Tunisia witnessed two IPOs with one listing while one IPO was issued in Oman.
The IPO of Oman’s Bank Nizwa, which closed in the third week of May, raised $159 million through issuing 40% new shares that were covered 11.35 times. Bank Nizwa’s successful issuance may pave the way for the awaited IPOs of Al Izz International Bank and Oman Arab Bank. The outlook continues to be positive with the Saudi Air Lines Catering Company also planning to come to the market.
Given the large Saudi IPOs, it is perhaps no surprise that the best-performing fund tracked by Zawya was the Falcom IPO fund, which focuses on the Saudi market and achieved 42% growth in the first quarter.
The first quarter of 2012 also yielded some interesting market data. Egypt’s stock market gained 36% as it rebounded from the severe decline experienced in 2011 during the country’s revolution. The Saudi Arabia and Dubai stock exchanges gained more than 22% in the first quarter, though performances have since lagged. The average price-to-earnings ratio was highest on Kuwait’s exchange.
Zawya is a business information database for the Middle East and North Africa
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