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RIYADH: Initial public offerings in the Middle East are poised for continued positive aftermarket performance this year, following significant post-IPO gains in the first quarter, a new report stated. 

PwC’s latest IPO+ Watch report highlighted the Saudi Stock Exchange’s emergence as a dominant force in Gulf Cooperation Council equity market launches activity, hosting the majority during the quarter, underscoring the region’s attractiveness to investors seeking dynamic opportunities. 

“Tadawul is reported to remain the most active exchange in the GCC with all but one IPOs taking place on either Tadawul main market or the Nomu parallel market,” the report stated. 

On the primary market, three IPOs garnered a combined total of $667 million, while on the secondary market, six offerings raised $57 million in total. 

Notable among the recent successes are MBC Group Co. and Avalon Pharma, both witnessing substantial market gains. 

However, the report noted that the market’s attention has been captured by the demand for Dubai Parking, which set a new record for subscription levels at the Dubai Financial Market, being oversubscribed by 165 times. 

The offerings landscape in the Middle East during the first three months of this year was characterized by activity across various sectors, showcasing a diverse range of investment opportunities.  

From consumer markets with companies like Parkin Co. and Modern Mills for Food Products Co., to health industries represented by Avalon Pharma, and technology, media, and telecommunications with MBC Group Co., the IPO wave has touched multiple sectors. 

Additionally, smaller-scale market debuts were observed in the financial services, industrials, manufacturing, and automobile sectors. 

Muhammad Hassan, capital markets leader at PwC Middle East, expressed optimism, citing Parkin’s oversubscription and double-digit post-IPO gains as indicators of sustained positive momentum. 

“We expect the privatization agenda across the GCC, combined with the ambition of private family businesses to go public, will continue to drive issuance supporting positive momentum in GCC IPO activity in 2024,” he added. 

Looking ahead, the report anticipated continued strength in the public flotation landscape for the remainder of 2024, buoyed by a robust pipeline.  

Private sector companies seeking liquidity and access to capital are expected to drive much of this activity, with Saudi Arabia and the UAE leading the charge. Nevertheless, there’s growing momentum in markets like Oman and Qatar, signaling a broader regional expansion of IPO activity.

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