DUBAI, 8 March 2005 — Private equity firms will play a major role in driving some 24 initial public offerings (IPOs) currently in the pipeline in the Gulf Arab region, the head of a Dubai-based private equity firm said yesterday. “Since 2001, we’ve had only 15 IPOs in the GCC (Gulf Cooperation Council states) which raised four billion dollars,” Arif Masood Naqvi, executive vice chairman and chief executive officer of Abraaj Capital, told a two-day Private Equity International Middle East Forum.

“There are close to 23 or 24 IPOs in the pipeline at present. Private equity firms will play a major role in driving this activity,” he told some 400 executives from international banks and corporations.

Investors in the Gulf region are pouring liquidity from soaring oil prices into equities.

“A lot of people have the view that post-9 11 brought money back to the region, but that’s nonsense,” Naqvi told AFP.

“What we are seeing now is a knock-on effect from high oil prices,” he said. “And instead of being sent out, it’s retained. That is the post-9 11 effect... (Stock) markets have taken off, there’s lots of investment opportunities and people are making money,” he added.

Abraaj Capital has completed more than $500 million in private equity transactions in the Middle East and North Africa region, generating an internal rate of return of more than 35 percent over a nine-year period. It also has more than $260 million of assets under management.

“Rational investors are not just excited about liquidity but are investing long-term,” he said.

The resurgence of IPOs started with oil prices but the boom in real estate and stock markets has also contributed.

Analysts have estimated that by the end of 2005, some $9 billion will be raised through several IPOs in the six GCC states of Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates (UAE).

In the UAE, the IPOs of Amlak Finance, Finance House and Arabian Technical Construction were last year oversubscribed 33, 78 and 64 times, respectively.

In Saudi Arabia, the Sahara Petrochemical Company’s IPO was oversubscribed 22 times. Etisalat Consortium, the second mobile phone operator in the kingdom, raised $267 million last year after floating 20 percent of its stock.

At least eight privatization projects totaling some $2.6 billion are set to take place this year. State-owned Qatar Gas, Bahrain Telecommunications Co., courier major Aramex and UAE sole telecoms provider Etisalat are all selling stakes.