GCC Capital Markets Watch - Q1 2023

Regional Activity

Q1 2023 GCC IPO markets experienced significant level of activity as initiatives developed by various countries in the region to stimulate IPO activities are yielding results. The government of Dubai has also launched the D33 Economic Agenda this quarter to capitalize on the current favorable economic landscape with the aim of doubling the size of Dubai’s economy in the next decade which is likely to lead to additional capital raising activities. 

The UAE had 2 IPOs raising USD 3.0 billion, both listed on Abu Dhabi stock exchange (“ADX”), making the country ranked 2nd by proceeds globally in Q1 2023. The IPO of ADNOC Gas PLC on ADX generated USD 2.5 billion in proceeds. This IPO marked the biggest IPO within the GCC and globally for the quarter and became the largest ever IPO on ADX to date, breaking the record set by Borouge in Q2 2022. The offering was 50 times oversubscribed with a total demand value of USD 124 billion. ADNOC Gas Plc marks the third subsidiary listing by the ADNOC Group, following the IPOs off ADNOC Drilling and ADNOC Distribution that completed in 2021 and 2017 respectively. Whilst Dubai did not have any listing in Q1 2023, the first listing on DFM for the year has already taken place at the time of writing. The currency exchange business Al Ansari Exchange completed its IPO on DFM in April this year. 

In the Kingdom of Saudi Arabia, 6 IPOs took place on Tadawul Nomu in Q1 2023 generating USD 71 million, which represents 2.1% of the total GCC proceeds. Leen Alkhair Trading Co. and Noforth Food Products Co. were the two largest listings on Tadawul Nomu in Q1 2023 raising USD 17 million and USD 12 million respectively. There was also a direct listing of Aleqemam for Computer Systems on Tadawul. Although the level of KSA IPO activity has decreased since Q4 2022, the IPO pipeline for KSA remains buoyant with reportedly at least 5 IPOs already underway for Q2 2023. 

In the Sultanate of Oman, Abraj Energy Services completed its IPO on the Muscat Stock Exchange (MSX) which generated USD 244 million in proceeds and was 8.7 times oversubscribed. Abraj Energy Services is Oman’s largest oilfield services provider. Its IPO is the largest on MSX since the 2010 listing of Ooredoo Oman. The listing of Abraj Energy Services is a manifestation of the Oman Investment Authority (“OIA”) initiative to encourage IPO activities on the MSX by privatizing government investments. MSX also hosted the private placement of Oman Qatar Insurance Company this quarter.

Since January, MSX has also joined the Tabadul digital exchange hub that was set up by ADX and Bahrain Bourse. This hub enables mutual market access that provides a trading network between these regional stock exchanges, further enhancing liquidity for investors participating in these markets. 

The Qatar Stock Exchange (“QSE”) did not have any IPOs but hosted the direct listing of Beema and Dukhan Bank.

GCC debt markets have been active in Q1 2023, particularly in the UAE.

In the sovereign debt market, the UAE federal government raised USD 6.0 billion through the listing of two treasury bonds on Nasdaq Dubai. Also in the UAE, the Government of Sharjah issued USD 1.0 billion of GMTN instruments on Nasdaq Dubai.

In the corporate debt market, Industrial and Commercial Bank of China Limited  (through various branches) issued carbon-neutrality-themed bonds with a total value of USD 2.2 billion on Nasdaq Dubai. Emirates NBD PJSC also issued a USD 1.0 billion bond on Nasdaq Dubai.

Nasdaq Dubai also witnessed a high level of sukuk activity including the listings of corporate sukuks by IDB Trust Services Limited, DIB Sukuk Limited and EL Sukuk Company Limited  worth USD 2.0 billion, USD 1.0 billion and USD 272.5 million, respectively.

Share price performance of 2021, 2022 and 2023 GCC IPOs* by sector, relative to the respective all share index, from the IPO date to 31 March 2023

Source: Eikon (Thomson Reuter), PwC Analysis

_{The percentage figures shown in the chart above are the average share price movements of the newly listed companies under each sector relative to the index performance of the respective exchange.}

^{*The IPOs of Al Mal Capital REIT and Oman reinsurance have been excluded due to insufficient data.}