Abu Dhabi to continue to experience IPO boom next year

Abu Dhabi to continue to experience IPO boom next year
The UAE launched a fund worth 5 billion dirhams to boost public listings. (Shutterstock)
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Updated 14 November 2022

Abu Dhabi to continue to experience IPO boom next year

Abu Dhabi to continue to experience IPO boom next year

RIYADH: Abu Dhabi, alongside Saudi Arabia, has seen a spike in initial public offering listings this year, and is on track to continue the trend next year.

The UAE capital is likely to host an additional three IPOs this year and at least 11 by 2023, Bloomberg reported, citing an official.

This is happening in line with a trend that sees buyers showing greater appetite for the Middle East bourses which had traditionally been a dour market for new shares.

“Next year, it’s going to be an amazing pipeline,” Abu Dhabi Department of Economic Development Chairman Mohamed Ali Al Shorafa told Bloomberg TV in an interview. “Over 11 companies (are) being either advised or in final stages for application approval for the listing on Abu Dhabi stock market.”

In recent months, a fund worth 5 billion dirhams ($1.36 billion) was launched to boost public listings, Al Shorafa said. 

In preparation for listing, family-owned and private companies have sought government assistance from the fund, he said.

Burjeel Holdings, which raised $300 million last month, listed through the fund, which also targets companies in the manufacturing and financial services sectors, Al Shorafa said.

There is strong investor interest in listings in the Middle East, especially Riyadh, Abu Dhabi and Dubai, which garnered $18 billion this year. This represents almost half of the IPO money raised in Europe, the Middle East and Africa, data compiled by Bloomberg showed.

During the first half of the year, Saudi Arabia’s stock market saw significant growth in listings, with IPOs on the main index alone raising SR15.2 billion ($4 billion).

Along with 10 record listings, Saudi's main index TASI witnessed nine further offerings from existing listed companies, generating SR10.7 billion, a report by the Saudi Exchange shows.

This year’s biggest IPOs were pharma-chain operator Nahdi Medical Co., Public Investment Fund’s digital security firm Elm Co., and Aldawaa Medical Services Co.

Nahdi topped the list with a SR5.12 billion IPO on Saudi Arabia’s main market, followed by Elm with SR3.07 billion in proceeds. Aldawaa raised almost SR1.86 billion.

Saudi IPOs are on course for a record year, as the number of listings in the first half of 2022 has already surpassed those of last year, according to the chairman of the Capital Market Authority.

“Undoubtedly, the number of IPOs we have for listing and offering is the largest that it has been,” Mohammed Elkuwaiz told Arab News.

Speaking at a fintech event in Riyadh on July 26, Elkuwaiz added: “We already exceeded the number of IPOs we had last year, and we think the number will likely get even bigger.”

The Saudi Stock Exchange, also known as Tadawul, has recorded 17 initial share sales, generated proceeds amounting to $5.07 billion in the first half of the year.

Tadawul dominated the Gulf Cooperation Council in IPOs last year, with utility provider ACWA Power marking the region’s largest share sale after its float generated as much as $1.21 billion.