Deal values also plummeted 57 percent to $358 million as compared to the $830 million raised during the same period last year. PwC, a leading international professional services organization, believes that the drop in the first half of 2011 in both the number and value of GCC IPOs is reflective of the continuing investor caution in light of current global economic uncertainties which has weighed down demand for new issues.

Steve Drake, head of PwC Capital Markets Middle East, said: "Although the Saudi market has been uncharacteristically quiet in terms of IPOs in the first half of 2011, from what we are seeing, we anticipate a number of flotations coming to the Tadawul in the second half. However, with the arrival of the holy month of Ramadan and the summer holiday period, late September or early October is likely to be the earliest we see the next Saudi IPO."

However, unlike last year, where the IPO activity in the GCC region was dominated by Saudi Arabia's Tadawul, the UAE bourses were the most active in the region accounting for three out of the four IPOs in the first half of 2011 and representing 74 percent of the total capital raised. Eshraq Properties Company, a real estate company in the UAE, raised $225 million on the Abu Dhabi Stock Exchange and accounted for 63 percent of the total amount raised in the GCC.

The fully subscribed Eshraq Properties drew a number of local institutional investors as well as GCC investors. Saudi Integrated Telecom Company's was the only IPO on Tadawul raising $93 million in May this year and this performance was in sharp contrast to the seven IPOs in the first half of 2010, which raised $685 million. The two other IPOs in the UAE during the first half included the $18 million issue by Insurance House and a $22 million issue by Wataniya.

The three IPOs in the UAE during the first half have brought a much-awaited end to the drought of IPOs on the UAE exchanges. Most notably, the IPO by Eshraq Properties, a company in the recession-hit real estate sector, is a major confidence booster for both the investors as well as other companies looking to IPO in the near future.

The debt market in the GCC continues to grow with 2011 first half-year results improving compared to the same period last year. However, a large proportion of the debt issues in the first half of 2011 were sovereign and government-related entities and among the most prominent were the bonds and sukuk issued by the Qatar Central Bank amounting to $13.7 billion in total. Performance of corporate issuances on a stand-alone basis was mixed during the first half of this year as the political unrest in the GCC had a negative impact, especially during the March-April period. The majority of the corporate debt issuances during the first half of 2011 have targeted the euro market where lenders have shown continued appetite for GCC bonds. The tenures for such issuances ranged between three to 15 years and there were no short-term issuances.

The largest corporate issuance in the period was the $4.3 billion bond by the International Petroleum Investment Company which was split into a 550 million pounds, 15-year component and two 1.25 billion euro tranches with five- and ten-year tenures, respectively. The coupon varied between 4.875 percent and 6.875 percent.

Other major conventional issuances included the $1.8billion issue by Abu Dhabi's Aabar Investments carrying a coupon rate of four percent and a tenure of five years and the $1 billion issue by UAE-based Emirates Airlines with a coupon rate of 5.125 percent and also having a tenure of five years.

As with the bond market, the sukuk issuances in the first half were pre-dominantly boosted by the $9.1 billion issuance by Qatar Central Bank. Other corporate sukuk issuances in the GCC region included the $750 million issuance by Islamic Development Bank, the $500 million by Emaar Properties, the $400 million by Sharjah Islamic Bank, and the $267 million by Bank AlJazira.