Saudi Arabia Dominates the GCC IPO Market with a 594% Surge
In a groundbreaking report by Kuwait Financial Centre, Saudi Arabia emerged as the leader in the Gulf Cooperation Council’s initial public offering market, experiencing an astonishing 594 percent surge in the first quarter of 2024.
The report, issued by the renowned organization known as Markaz, unveiled the dynamic and ever-evolving landscape of IPO activities across the GCC region, shedding light on significant shifts and trends in investment flows.
Key Findings
Saudi Arabia showcased remarkable growth by raising a total of $503 million from eight offerings, solidifying its position as a powerhouse in the IPO market.
Despite Saudi Arabia’s impressive performance, 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 quarter of 2024 – marking a 73 percent year-on-year decline.
In comparison, the same period in 2023 saw issuers raise a substantial $3.5 billion through 12 offerings.
Market Share Breakdown
During the first quarter of 2024, Saudi Arabia captured a staggering 54 percent of the total proceeds in the GCC, while the UAE accounted for the remaining 46 percent, derived from just one offering – signaling an 87 percent decrease compared to the previous year.
Interestingly, other countries in the GCC did not witness any new listings activity during this quarter, further emphasizing the dominance of Saudi Arabia and the UAE in the IPO market.
Sectoral Analysis
The transportation sector emerged as a frontrunner during this period, fueled by Dubai-based Parkin Co.’s offering, which raised an impressive $429 million, constituting nearly 46 percent of the total GCC IPO proceeds.
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 closely behind were IPOs from the pharmaceutical, healthcare equipment, and materials sectors, accounting for 14 percent, 2 percent, and 1 percent, respectively.
Market Performance
In terms of exchange-wise performance, $445 million came from listings on Saudi Arabia’s Main Market, with an additional $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 and competitiveness of both countries’ capital markets.
Future Prospects
Saudi Arabia is intensifying efforts to attract more IPOs by implementing measures to appeal to international investors and enhance market liquidity.
At the recent Capital Market Forum in May, the CEO of the Saudi Exchange, Mohammed Al-Rumaih, unveiled a promising lineup of upcoming IPOs across various sectors, attributing this success to initiatives like Market Making and Single Stock Options.
With ongoing reforms aligning regulatory frameworks and increased inclusion in global indices, Saudi Arabia is solidifying its position as a top destination for foreign investment, further bolstering its reputation on the global stage.