Saudi Arabia continued to lead the GCC markets with two IPOs in the last quarter of 2011 contributing $148 million or 70 percent of the total amount raised on the GCC exchanges. The only other IPO in the GCC during Q4, 2011 was Oman’s SMN Power Holding which raised $63.8 million. Although the number of IPOs in the last quarter of 2011 remained the same as Q4, 2010, the average IPO size decreased significantly from USD 343m to $71 million in Q4, 2011.

Steve Drake, head of PwC Capital Markets in the Middle East region, said: “Investor risk caution coupled with issuer reluctance to sell at perceived lower valuations contributed to a slow and stifled year in the equity markets. Issuers in the GCC deferred their IPO plans in 2011 as global economic instability such as the debt crisis seen in the euro zone and the regional political unrest impacted investor confidence. However, we are beginning to see issuer interest in some regional markets although the real test will come when we see the first IPO of 2012 and the level of interest shown by the investor community.”

In 2011, there were a total of nine IPOs in the GCC raising a total of $789 million which was well below 2010 levels where 12 IPOs raised $2.03 billion, a 25 percent decrease in IPO volumes and a 61 percent decrease in value. Despite a reasonable start to 2011 with three IPOs in the first half of the year raising a total amount of $265 million, the UAE exchanges remained largely subdued with no IPO activity during the second half of the year. Saudi Arabia hosted five IPOs on Tadawul during 2011 which contributed 58 percent of the total amount raised in the GCC. Saudi Arabia continues to be the most active IPO market in the region during recent times, however, the exchange underperformed considerably in 2011 as IPO volumes fell 44 percent whereas total money raised decreased by 55 percent compared to 2010. Oman’s last quarter issuance was the only other issuance outside the UAE and Saudi Arabia as all other GCC exchanges remained dormant during 2011.

Drake added: “Regional IPO activity during the year has been difficult with both issuers and investors exhibiting caution as to when is the right time and condition to return to the market. As we are moving into 2012, we are seeing improvements in confidence on the supply side and so would expect to see increased activity in certain regional markets during 2012. We see a number of issuers beginning to prepare themselves for an IPO so that when the time is right, they are ready to act quickly.”

In Europe, the market for company floats has suffered a difficult fourth quarter, rounding off a tough year for IPOs across the European region. In Q4, 2011, 78 IPOs raised just $1.12 billion, an 81 percent decrease in offering values compared to Q3, 2011 and 83 percent down year on year, PwC’s latest IPO Watch Europe report has found.

London dominated activity in a muted quarter, raising $1.04 billion, 92 percent of total European IPO value, with the London IPO of Polymetal raising $545.1 million, 49 percent of all value raised in Europe.

Despite a subdued second half of 2011, annual European IPOs raised $34.3 billion, in line with 2010. Volumes increased by 13 percent to 430 IPOs. London generated $18.9 billion, more than half of the money raised, despite only hosting a quarter of the IPO deals across Europe. The top 15 deals raised $25.9 billion, 75 percent of total IPO value across Europe in 2011, with the IPOs of Glencore, Vallares and Justice in London and Bankia and Banca Civica Dia in Spain raising $18.9 billion in their own right.

GCC equity market indices ended 2011 in the red, as the Arab Spring and the European debt crisis washed away the impetus gained toward the end of 2010. The markets continued trending downward over the course of the year as activity remained sluggish and liquidity dried up due to tightening of bank credit and the political unrest weighed down on institutional investors’ confidence in the perceived riskier equity assets. The Bahrain stock exchange was at the bottom of the league table shedding 20 percent at the end of 2011 followed by Dubai which decreased by 17 percent.