Saudi Arabia leads GCC IPO market with 594% surge in proceeds: Markaz

Saudi Arabia led the Gulf Cooperation Council initial public offering market with an annual 594 percent surge in the first quarter of 2024, according to Kuwait Financial Centre.

A report issued by the organization, commonly known as Markaz, detailed the dynamic landscape of IPO activities across the GCC region, revealing significant shifts and trends in investment flows.

The report highlighted that Saudi Arabia has demonstrated considerable growth, raising a total of $503 million from eight offerings.

Despite the Kingdom’s activity, the overall GCC region witnessed a downturn in IPO activity in terms of value, with total proceeds amounting to $931 million through nine offerings in the first three months of 2024 – a 73 percent year-on-year decline.

The same period of 2023 saw issuers raise $3.5 billion through 12 offerings.

For the first quarter of 2024, Saudi Arabia capturing 54 percent of the total proceeds in the GCC, while the UAE accounted for the remaining 46 percent, which came from just one offering – signaling an 87 percent decrease compared to the same period last year.

Other countries in the group did not witness any new listings activity during this quarter.

On a sectoral basis, transportation emerged as the frontrunner, driven by Dubai-based Parkin Co.’s offering, which raised $429 million, constituting nearly 46 percent of total GCC IPO proceeds during the period.

Additionally, Saudi Modern Mills Co.’s listing in the food and beverage sector garnered over $314 million, contributing 34 percent to the total proceeds.

Following these were IPOs from the pharmaceutical, healthcare equipment, and materials sectors, accounting for 14 percent, 2 percent, and 1 percent, respectively.

Exchange-wise, $445 million came from listings on the Kingdom’s Main Market, with $57 million on the Nomu-Parallel Market.

Meanwhile, the UAE markets accounted for the remaining 46 percent, with $429 million listed on Dubai’s exchange, showcasing the vibrancy of both countries’ capital markets.

Saudi Arabia is ramping up efforts to attract more offerings by introducing measures to appeal to international investors.

During the Capital Market Forum earlier in May, the CEO of the Saudi Exchange, Mohammed Al-Rumaih, highlighted a lineup of IPOs spanning multiple sectors, crediting this success to initiatives like Market Making and Single Stock Options.

With reforms aligning regulatory frameworks and inclusion in global indices, the Kingdom is gaining prominence as a destination for foreign investment.