Back to the complete issue
Tuesday, 5 November 2019

MENA IPOs to pick up next year -E&Y

The MENA region’s IPO activity will also pick up over the next 12 months following a weak third quarter, Ernst & Young said in its Global IPO Update 3Q2019 (pdf). “IPO activity is expected to progress cautiously, with an optimistic outlook,” the report says, citing Kuwaiti equity upgrades to the MSCI index, Saudi Arabia’s planned privatization drive, and amendments in the UAE to list freezone companies.

We also have a privatization program don’t forget, one that is seemingly on hiatus until the new year. Public Enterprises Minister Hisham Tawfik said last week that Alexandria Container and Cargo Handling and Abu Qir Fertilizers are ready to sell additional shares in the EGX, and are waiting on the results of the Aramco stake sale before moving ahead. Heliopolis Housing and Development is also slated to go public next year after the company has awarded the 10% stake + management rights contract to one of the bidders.

The third quarter was weak for MENA IPOs, with only three companies listing between July and September with total proceeds of USD 256 mn. “Investors returned to a more cautious posture” following a strong second quarter, the report says

Globally, it’s much of the same story: Global headwinds — including the US-China trade war, ongoing protests in Hong Kong, and the prospect of a hard Brexit — have all put a damper on investor sentiment during the past quarter. The number of IPOs going to market in 9M2019 dropped 26% y-o-y, while the proceeds from these transactions dropped 24% y-o-y. The third quarter of the year, which the advisory firm notes is usually a slow period for IPOs, saw a total of 256 IPOs, marking a 16% dip from the previous quarter. However, EY says the “backlog of high-quality IPOs continues to grow as issuers wait for better market sentiments.”

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.