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Wednesday, 30 March 2022

LuLu plots UAE IPO next year

Middle East supermarket giant Lulu Group International could IPO in the UAE next year, Bloomberg reports, citing people familiar with the matter. The Abu Dhabi-based, Indian-owned company is reportedly soliciting offers from international banks to advise on the offering. Lulu’s was valued at USD 5 bn during its last valuation in 2020.

It’s not yet clear if Lulu is looking to list subsidiaries or the parent firm or which bourse it would opt for, with one source saying the firm could end up issuing multiple offerings across Gulf exchanges.

LuLu is carving out a chunk of Egypt’s retail market for itself: In 2020 the retailer said it would invest USD 1 bn in expanding in Egypt, spending that was later funded by Abu Dhabi wealth fund ADQ. The money will allow the company to establish up to 30 hypermarkets and 100 mini markets, as well as logistics hubs and distribution and fulfillment centers.

The Gulf IPO market has been on a tear so far this year as surging oil revenues flood capital markets with cash. The region has been the only bright spot in the global IPO market so far this year, as rising interest rates and the Ukraine conflict weigh on investor sentiment. MENA IPOs have raised a combined USD 4.8 bn so far in 2022, surpassing proceeds raised by European listings for only the second time since 2009.

MEANWHILE- FDI in KSA hit a decade-high last year: Foreign direct investment into ٍSaudi Arabia reached USD 19.3 bn in 2021, its highest annual inflows since 2010, according to fresh central bank data picked up by Bloomberg. The surge in investment was mainly due to state-owned Aramco selling a USD 12.4 bn stake in its pipelines arm to investors in the second quarter.

But the crown prince wants more: The national investment strategy set an FDI target of more than USD 100 bn annually by 2030, as the government under Crown Prince Mohammed bin Salman looks to diversify the country’s oil-dependent economy. In line with the ambitious plan, Saudi’s Investment Ministry issued more than 3.3k new foreign investment licenses in 2H2021 — more than three times the licenses issued over the same period in 2020.




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The EGX30 rose 1.4% at yesterday’s close on turnover of EGP 949 mn (2.4% below the 90-day average). Foreign investors were net sellers. The index is down 4.7% YTD.

In the green: Orascom Construction (+7.1%), CIRA (+7.1%) and Fawry (+5.4%).

In the red: GB Auto (-7.4%), Credit Agricole Egypt (-1.8%) and Palm Hills Development (-1.0%).

Asian markets are solidly in the green this morning, joining yesterday’s US / Europe rally as anticipation of a peace agreement between Russia and Ukraine grows. Futures are mixed right now: shares in the US are on course to fall at the opening bell, as are the German DAX and the Euro Stoxx 50. Shares in the UK, France and elsewhere in Europe are all expected to see early gains.

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