Markaz: GCC Markets Witnessed the Highest Number of Companies Going Public in 2022

Kuwait Financial Centre “Markaz” recently released its GCC Equity primary Offerings overview where it reported that the GCC Markets witnessed a total of 90 initial public offerings (“IPO”) in the period from 2016 – August 2022, with a total offering amount of USD 55.9 billion as of 31 August 2022.

The report issued by Markaz also highlighted that over the past seven years, the GCC markets witnessed the highest number of companies going public in the year 2022 with 27 IPOs raising a total of USD 14.5 billion. Whereas the year 2019 witnessed the highest value for IPO offerings with total of USD 27.3 billion, out of which Saudi Aramco’s offering constituted 94% of the total value offered for the year.

GCC Equity Primary Offerings: 2016 – 31 August 2022

Total Value by Country

In the period from 2016 - 31 August 2022, Saudi Arabia’s stock market witnessed both the highest number of IPOs and the largest total offering amount among GCC stock markets, with a total of USD 38.9 billion of proceeds through 60 IPOs. It is followed by the United Arab Emirates (“UAE”) with total equity primary offerings value of USD 14.5 billion through 11 IPOs. Abu Dhabi Securities Exchange (“ADX”) accounted for 46 per cent of total UAE equity primary offerings with a total of USD 6.7 billion raised while the Dubai Financial Market (“DFM”) accounted for 54 per cent with a total of USD 7.9 billion raised. During the same period, Boursa Kuwait witnessed a total 5 IPOs with a total offerings value of USD 803 million.

Sector Allocation

In the past seven years, The Energy sector constituted 49 percent of total GCC equity primary offerings raising a total of USD 27.7 billion in proceeds. It is worth noting that Saudi Aramco’s IPO in 2019 constitutes about 92% of the GCC Energy sector’s primary offerings. The Utilities and Materials sectors follow with 14 percent and 6 percent, respectively, of total GCC equity primary offerings raising a total of USD 7.6 billion and USD 3.5 billion, during the same period.

Top Equity Offerings:

Saudi Aramco’s IPO on Tadawul was the largest GCC equity offering by value after its 2 percent share sale, making it the largest IPO in history for the region and globally (Total Value ~ US$25 Bn.). Dubai Electricity and Water Authority PJSC (“DEWA”) and Borouge PLC came in second and third respectively after their equity offering in 2022, where DEWA offered 9.0 billion shares on DFM at an offer price of AED 2.48 (total value of US$ ~$6.1 bn.), while Borouge offered 3.0 billion shares on ADX with an offer price of AED 2.45 (total value of US$ ~$2.0 bn.).

GCC Equity Primary Offerings: YTD 2022 (As of 31 August 2022):

For the year 2022, GCC markets raised a total of USD 14.5 billion through 27 IPOs with the month of February witnessing the highest activity with 7 IPOs raising a total of USD 2.1 billion, whereas April 2022 witnessed the largest IPO by value for the year after the USD 6.1 billion offering of DEWA.

Total IPO Value by Country

In 2022, the UAE witnessed the highest offering amount for the year with a total value of USD 9.7 billion being raised through 5 IPOs. DFM accounted for 67 percent of total UAE equity primary offerings for the year with a total of USD 6.5 billion being raised in proceeds while ADX accounted for 33 percent with a total of USD 3.2 billion being raised in proceeds. Saudi Arabia saw the highest IPO volume, compared to its GCC peers, with 20 IPOs raising USD 4.5 billion in proceeds.

Boursa Kuwait witnessed 1 IPO with Ali AlGhanim Sons Automotive Company raising a total of USD 323 million through its IPO. The automotive company floated 45% in June 2022 by offering 124,875,000 shares with an offer price of 793 fils.

Sector Allocation

The Utilities sector constituted 42 percent of total GCC equity offerings for the year where the sector raised USD 6.1 billion in proceeds following DEWA’s offering, followed by Materials and Consumer Staples raising a total of USD 2.5 billion which constituted 17 percent and USD 2.0 billion which constituted 14 percent, respectively.

Top Equity Offerings

DEWA’s IPO on DFM raised the most proceeds at USD 6.1 billion in April 2022 after its 18 percent share sale, making it the largest GCC IPO for the year and biggest IPO for the region since Saudi Aramco’s 2019 offering. As of 31 August 2022, DEWA constituted 42% of total GCC IPO amount YTD. Borouge PLC came in second after successfully listing on ADX in June 2022, making it the largest-ever IPO for Abu Dhabi. The company floated 10 percent of its total issued share capital, raising a total of USD 2.0 billion which constituted 14 percent of total GCC equity offerings YTD.