Gulf stock listings nosedive in 2016: Report

Gulf companies looking to issue IPOs decided to put them off due to events including Brexit, the US presidential election and volatility on oil markets up until the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production. (Reuters)
Updated 04 January 2017

Gulf stock listings nosedive in 2016: Report

KUWAIT CITY: Stock markets in the energy-rich Gulf saw a sharp drop in the number of initial public offerings in 2016, as well as the value of listings, a report said Wednesday.
Only three IPOs (Initial Public Offerings) were made in the region last year, half the number recorded in 2015 and the lowest in 15 years, Kuwaiti investment firm KAMCO Research said in the report.
Their value was a meager $745 million, the lowest since 2013 and way below the record $10.9 billion raised by stock flotation in 2008 and 2014 separately, KAMCO said.
All three of last year’s IPOs were from Saudi Arabia.
There were none in the remaining members of the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar and United Arab Emirates (UAE).
KAMCO said Gulf companies looking to issue IPOs decided to put them off due to events including Brexit, the US presidential election and volatility on oil markets up until the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production.
Oil producers agreed in late 2016 to cut crude output by 1.8 million barrels a day to shore up weak prices.
The agreement took effect at the start of January.
Companies were also deterred by extreme turbulence on GCC stock markets in the first 10 months of last year before they rebounded in the final two months as oil prices advanced.
Gulf companies were likely to wait until encouraging economic data starts to appear before they enter the IPO market with full force, KAMCO said.


Africa development bank says risks to continent’s growth ‘increasing by the day’

Updated 18 August 2019

Africa development bank says risks to continent’s growth ‘increasing by the day’

  • The trade dispute between US and China has roiled global markets and unnerved investors
  • African nations need to boost trade with each other to cushion the impact of external shocks

DAR ES SALAAM: The US-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters.
The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight.
Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows.
Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa — of 4 percent in 2019 and 4.1 percent in 2020 — if global external shocks accelerate.
“We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters late on Saturday on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam.
“You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.”
The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks.
“I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen significantly and so demand for products and raw materials from Africa will only fall even further,” he said.
“It will also have another effect with regard to China’s own outward-bound investments on the continent,” he added, saying these could also affect official development assistance.
Adesina said a continental free-trade zone launched last month, the African Continental Free Trade Area, could help speed up economic growth and development, but African nations needed to remove non-tariff barriers to boost trade.
“The countries that have always been facing lower volatilities have always been the ones that do a lot more in terms of regional trade and do not rely on exports of raw materials,” Adesina said.
“The challenges cannot be solved unless all the barriers come down. Free mobility of labor, free mobility of capital and free mobility of people.”