Saudi Arabia led the Gulf Cooperation Council’s initial public offering market in the first half of 2024, raising $2.1 billion in what was an annual increase of 141 percent, an analysis has revealed.
In its latest report, Kuwait Financial Center, also known as Markaz, noted that the Kingdom saw 19 offerings in the six months to the end of June, accounting for 59 percent of the total IPO proceeds in the GCC region. These included $1.95 billion listed in its main market and $143 million in the parallel market, also known as Nomu.
Saudi Arabia’s ambitious privatization and diversification efforts across sectors such as healthcare, technology, and renewable energy have significantly broadened the market’s appeal.
These initiatives offer investors exposure to high-growth industries, positioning the Kingdom as an attractive destination for investment in sectors poised for substantial development and innovation.
Led by its pivotal Capital Market Authority advancing Vision 2030 goals, the Saudi capital market is on a journey of expanision, and saw net foreign investment reach SR198 billion ($52.79 billion) in 2023 – a 7.7 percent annual increase, according to CMA’s June report.
Top IPOs
Among the top five GCC IPOs by proceeds in the first half of this year, the Markaz report noted that Dr. Soliman Abdulkader Fakeeh Hospital Co., listed on Saudi Arabia’s main market, raised $764 million, making it the largest IPO during that period.
The healthcare firm offered 49.8 million shares, representing a 21 percent stake, and received an oversubscription of 119 times. The IPO proceeds accounted for 21 percent of the total GCC IPO proceeds during the period.
Alef Education, listed on the Abu Dhabi Securities Exchange, secured the second spot with its IPO raising $515 million in proceeds.
The company offered 1.4 billion shares, representing a 20 percent stake, which was oversubscribed 39 times.
According to Markaz, Alef Education’s proceeds constituted 14 percent of the total GCC IPO proceeds during the period.
Parkin Co., listed on the Dubai Financial Market, raised $429 million, making it the third-largest listing in the GCC region in the first half of this year.
The parking facility provider offered 750 million shares, equivalent to a 25 percent stake. The IPO proceeds constituted 12 percent of the total GCC IPO proceeds during the period and were oversubscribed 165 times.
Meanwhile, Spinneys Co., also listed on DFM, raised $375 million in proceeds. The supermarket chain offered 900 million shares, representing a 25 percent stake, and was oversubscribed 64 times.
Markaz revealed that Spinneys Co.’s proceeds constituted 11 percent of the total GCC IPO.
Similarly, Modern Mills Co., listed on Saudi Arabia’s main market, raised $314 million through the sale of 24.5 million shares, or a 30 percent stake, and was oversubscribed 127 times.
Modern Mills Company’s IPO constituted 9 percent of the total GCC IPO proceeds.
GCC IPO market
The overall GCC region experienced a decline in IPO activity in terms of value, with total proceeds amounting to $3.1 billion from 23 offerings in the first half. This represents a 32 percent decline compared to the same period of the previous year.
In the UAE, IPO proceeds totaled $1.3 billion in the first six months of this year, marking a year-on-year decrease of 67 percent. Of this amount, DFM hosted $805 million, constituting 23 percent of the total GCC IPO funds in the first half.
Similarly, ADX recorded $515 million in IPO capital, accounting for 14 percent of the total GCC IPO funds during the period.
Meanwhile, Kuwait saw IPO funds totaling $147 million during the same period, accounting for 4 percent of the total GCC IPO value and listed on Boursa Kuwait.
The report revealed that the healthcare sector accounted for nearly 22 percent of the total funds raised during the first half of this year through three offerings, totaling $788 million.
In contrast, the technology sector raised over $515 million during the same period, constituting 14 percent of the total GCC IPO proceeds.
Similarly, new listings from the industrial sector constituted 12 percent of the region’s total funds, followed by the consumer staples industry and the food and beverages sector at 11 percent and 9 percent, respectively.
Additionally, the commercial and professional services industry contributed 8 percent to the region’s total IPO funds, closely followed by the insurance sector at 6 percent.
Middle East IPOs
Overall, IPOs in the Middle East are set for continued positive aftermarket performance this year, following significant gains in the first quarter, as reported by PwC in May.
It also highlighted that the Saudi Stock Exchange has emerged as a dominant force in the GCC equity market.
In the same month, Mohammed Al-Rumaih, CEO of the Saudi Exchange, noted that the introduction of ‘Market Making’ and the debut of ‘Single Stock Options’ have enhanced Tadawul’s appeal among international investors.
Earlier this month, another report released by CMA noted that 42 companies listed in Saudi Arabia’s benchmark index and parallel market benefitted from the nominal value split mechanism in 2023.
This followed the CMA’s execution of the Companies Law and its Executive Regulations on Jan. 19, 2023, permitting listed firms to split stock par values from SR10 to various lower options.
Under this mechanism, a company divides its existing shares into multiples to enhance trading volume and accessibility for investors, without altering its total market capitalization.