**:Scroll.
Finance Associated Press, December 26 (Editor Zhao Hao) Overall, 2023 is undoubtedly a dismal year for global IPOs, but listing activity in the Middle East is extremely hot, and this momentum is likely to continue into 2024.
Over the past two years, the energy-rich region has become a busy IPO market, with many state-owned enterprises taking stakes in companies during periods of high time to help wean the economy off its dependence on oil. In addition, in the context of the Russia-Ukraine conflict and interest rate hikes by many central banks, investors' eyes are also on the Persian Gulf.
According to the compiled data, the total amount of funds raised in 2023 in the Middle East is $10.5 billion, which is less than last year's $23 billion, but also the third highest year since 2007. In 2019, due to Saudi Aramco's listing, that figure reached $312.
The data also shows that the Middle East accounted for 45% of the total EMEA (Europe, Middle East and Africa) IPOs this year, compared to 51% in 2022. Although not as good as last year, bankers do not expect the pace of Middle East IPOs to slow down anytime soon, given that strong growth, reforms, and tailwinds from investor demand remain.
Christian Cabanne, head of equity capital markets for EMEA at BofA, said the outlook for IPOs in the MENA region in 2024 is very strong. He added that the difference between this year and next could be that 2024 will see more private companies entering the market.
The first company to plan to go public next year is Flynas, a low-cost airline that allegedly has hired banks to provide related services, according to **. Other companies interested in going public include the UAE supermarket chain Spinneys Dubai LLC and Middle Eastern e-commerce platform Floward.
Earlier it was reported that Floward is in talks with Goldman Sachs and HSBC to plan an IPO in Saudi Arabia, which could be listed as early as next year.
The stock price is strong, but the risks remain.
Unlike Europe and the United States, IPO transactions in the Middle East are not only hot, but the stock price performance of newly listed companies is also significantly stronger. The data showed that the average increase in new shares that raised more than $100 million was close to 40%, and only one alternative investment manager, Investcorp Capital PLC, fell below the issue price.
This performance is likely to allow investors to continue to **more Middle Eastern companies**, especially considering that many companies have extremely attractive dividend yields and new exposure to some sectors.
Rami Sidani, an executive at Schroders Investment Management, said investors were now very keen to invest in these new sectors that had suddenly appeared in the market. As a result, there is a high demand for these ** and the IPO is relatively reasonably priced.
However, the Middle East ** market is not all smooth sailing, after the outbreak of the Palestinian-Israeli conflict in early October, the MSCI GCC countries index once appeared 32% decline. But as fears of the spread of conflict waned, the index fell by 12%.
Salah Shamma, a Franklin Templeton executive, said: "The market is still in good shape and has not been affected by the conflict. But if the situation escalates and the scope expands, it will certainly have a negative impact on the risk premium and investor perceptions. ”