Despite COVID-19, GCC IPO Market Active in 2021

30 more companies likely to list on Saudi bourse this year

IPO (The initial public offering) market remained active in the Gulf Cooperation Council (GCC) countries in 2020; despite increasing pressure on financial markets against the backdrop of the coronavirus pandemic early last year, according to a recent report.

A report issued by the Kuwait-based KAMCO Investment Company stated that the total IPOs of GCC countries dropped to seven issuances in 2020; compared to 12 in 2019, including the landmark Aramco IPO.

The proceeds of the GCC issuers on regional and international exchanges reached $1.87 billion from $29 billion in 2019.

KAMCO believes that the IPO market in the GCC countries could have witnessed higher activity in the year 2020; especially in the second half of the year.

Issuers chose to defer their primary market entrances, until secondary markets recovered from the impact of COVID-19, said KAMCO.

“This led to the back-end loaded issuances in 2020, while others pushed their plans into 2021.”

Concerning regional listings, Saudi Arabia continued to lead the primary markets as four out of the seven IPOs debuted on the Saudi Stock Exchange (Tadawul).

The kingdom also dominated in terms of IPO proceeds, with 78 percent of the issuances at $1.45 billion.

In Qatar, QLM Life and Medical Insurance Co had an issuance with the company raised $178 million in December.

Re-entering the regional IPO markets

UAE re-entered the regional IPO markets with the issuance of REIT Fund worth $95.3 million.

The report noted that Saudi healthcare operator Dr. Suleiman al-Habib Medical Services had the largest IPO in the region in 2020; with proceeds of $698.6 million, followed by the Kingdom’s Bin Dawood Holding with proceeds of $585.1 million.

KAMCO Invest also expects the gulf IPO market to remain active in 2021; given the number of catalysts that could support primary markets within the region.

Saudi Arabia will continue to lead the regional IPO market in 2021; as the kingdom is reportedly reviewing more than 15 applications for listing.

According to the report, UAE’s most important catalysts in 2021 are the launch of the Nasdaq Dubai Growth Market for SMEs and the impact of the Dubai Expo during the second half of 2021.