Saudi Arabia Leads GCC IPO Market in H1 2024
Saudi Arabia has emerged as the leader in the Gulf Cooperation Council (GCC) IPO market for the first half of 2024, raising $2.1 billion—a 141% increase compared to the previous year, according to a report by Kuwait Financial Center, known as Markaz. The Kingdom's 19 offerings accounted for 59% of the total IPO proceeds in the GCC, with $1.95 billion listed in the main market and $143 million in the Nomu parallel market.
Key Drivers
Saudi Arabia's strong performance in the IPO market can be attributed to its ambitious privatization and diversification efforts, particularly in sectors such as healthcare, technology, and renewable energy. These initiatives have broadened the market's appeal, offering investors exposure to high-growth industries and positioning the Kingdom as an attractive investment destination.
Capital Market Growth
The Saudi Capital Market Authority (CMA), advancing Vision 2030 goals, has significantly contributed to this growth. In 2023, net foreign investment in the Saudi capital market reached SR198 billion ($52.79 billion), marking a 7.7% annual increase, according to CMA's June report.
Top GCC IPOs in H1 2024
Dr. Soliman Abdulkader Fakeeh Hospital Co. (Saudi Arabia)
- Raised $764 million
- Offered 49.8 million shares (21% stake)
- Oversubscription: 119 times
- Accounted for 21% of total GCC IPO proceeds
Alef Education (Abu Dhabi Securities Exchange)
- Raised $515 million
- Offered 1.4 billion shares (20% stake)
- Oversubscription: 39 times
- Accounted for 14% of total GCC IPO proceeds
Parkin Co. (Dubai Financial Market)
- Raised $429 million
- Offered 750 million shares (25% stake)
- Oversubscription: 165 times
- Accounted for 12% of total GCC IPO proceeds
Spinneys Co. (Dubai Financial Market)
- Raised $375 million
- Offered 900 million shares (25% stake)
- Oversubscription: 64 times
- Accounted for 11% of total GCC IPO proceeds
Modern Mills Co. (Saudi Arabia)
- Raised $314 million
- Offered 24.5 million shares (30% stake)
- Oversubscription: 127 times
- Accounted for 9% of total GCC IPO proceeds
GCC IPO Market Overview
The 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 of 2024, a 32% decrease compared to the same period in the previous year.
UAE Market Performance
- Dubai Financial Market (DFM): $805 million in IPO proceeds (23% of total GCC IPO funds)
- Abu Dhabi Securities Exchange (ADX): $515 million in IPO capital (14% of total GCC IPO funds)
- Kuwait: $147 million in IPO funds (4% of total GCC IPO value)
Sector Contributions
- Healthcare: $788 million (22% of total funds raised)
- Technology: $515 million (14% of total funds raised)
- Industrial Sector: 12% of total funds
- Consumer Staples: 11% of total funds
- Food and Beverages: 9% of total funds
- Commercial and Professional Services: 8% of total funds
- Insurance: 6% of total funds
Middle East IPO Outlook
The IPO market in the Middle East is poised for continued positive performance, following significant gains in the first quarter of the year, according to PwC. The Saudi Stock Exchange, in particular, has emerged as a dominant force in the GCC equity market. Enhancements such as the introduction of 'Market Making' and 'Single Stock Options' have increased Tadawul's appeal among international investors.
Earlier this year, CMA reported that 42 companies in Saudi Arabia benefitted from the nominal value split mechanism, enhancing trading volume and accessibility for investors without altering total market capitalization.
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