Saudi Arabia to Lead MENA IPOs in 2024
Brace yourself, because Saudi Arabia is set to take the lead in the Middle East and North Africa region with a whopping 27 companies gearing up for initial public offerings on the Kingdom’s main market in 2024.
Promising IPO Pipeline in MENA Region
The latest analysis by Dubai International Financial Center, in collaboration with the London Stock Exchange Group, indicates a promising IPO pipeline in the MENA region this year. Several companies have postponed their listings from 2023 to early and mid-2024 in anticipation of more favorable market conditions.
Driving Deals in Saudi Arabia
DIFC revealed, “Deals will be driven mainly by Saudi Arabia, where 27 companies have expressed intent to list on the Saudi Exchange (Tadawul), in addition to expected follow-on issuances from Aramco and Savola.”
UAE IPO Inclusions
Not to be outdone, the IPO pipeline in the UAE includes listings from Parkin, Lulu Group, and Tabby.
Impact of Privatization on MENA Economy
The privatization of government-backed entities is leading to greater economic diversification, private sector development, and sovereign liquidity creation in the MENA region.
Market Growth and Reforms
Arif Amiri, CEO of DIFC Authority, highlighted, “Driven by the rise in IPOs, capital markets across the MENA region have seen significant growth, with reforms dedicated to improving market infrastructure, attracting even greater foreign investment flows.”
Global Investment Trends
The MENA IPO market surge in 2022 was acknowledged by Nadim Najjar, managing director for Central, Eastern Europe, Middle East, and Africa at LSEG. He noted the growing trend of enterprises looking to list publicly, attracting global investment banks and a wave of private capital.
Factors Influencing IPO Activity in 2024
The analysis emphasized that IPO activity in 2024 will hinge on global economic stability and recent post-IPO performances. Improved economic conditions could lead to a market revival, while interest rates and market volatility will sway market sentiment later in the year.
Debt Market Trends in MENA Region
DIFC predicted that the debt market in the MENA region will align with global trends, growing marginally in 2024 due to high interest rates and refinancing costs.
Government and Corporate Debt Issuance
Governments in the region are expected to drive issuance to cover budget deficits, refinance debt, and fund development projects. However, corporate debt issuance may slow down as borrowing costs remain high.