Abu Dhabi: Five initial public offerings (IPOs) from the Middle East and North African (Mena) raised $1.28 billion (Dh4.7 billion) during the first quarter of 2014, a decrease of 21 per cent in terms of value compared to Q1 2013, according to Ernst & Young’s Q1 2014 Mena IPO update.

“The Mena IPO market is off to a slower start in the first quarter compared to the same period last year,” Phil Gandier, Mena Head of Transaction Advisory Services at Ernst & Young, said in a statement. “However, compared to IPO performance over the past few years, Q1 2014 has been one of the best performing quarters.”

He added that the recently announced Emirates REIT and Marka IPOs will “spur further IPO activity and point the way to high levels of activity during the first half of 2014”.

Of the five IPOs, two were in Tunisia and one each from Qatar, Saudi Arabia and the UAE. The largest IPO in Q1 2014 was in Qatar, with Mesaieed Petrochemical Holding Company raising $905 million, marking the first IPO on the Qatari stock exchange since 2010.

The second largest IPO was the Gulf Marine Services from the UAE, which listed on the London Stock Exchange, raising $275 million.

The remaining IPOs raised less than $100 million each. Saudi Marketing Company raised $72 million on the Tadawul stock exchange in Saudi, while Sotipapier in Tunisia raised $26 million and Cellcom in Tunisia raised $6 million.

“The combination of attractive valuations and solid after-market performance means that financial sponsors are actively pushing companies to list,” Gandier said. “The companies expected to list in the region range from subsidiaries of family businesses to large established companies.”

He also said that the sectors likely to show strong IPO appetite are retail, consumer products and healthcare, as they have strong demographics.

With two IPOs, the oil and gas sector led in Q1 2014, followed by telecommunications, industrial manufacturing and retail.

Discussing projections for Q2 2014 and the second half of 2014, Gandier said he expected strong IPO activity driven by the transformation of family groups into institutional entities led by the younger generation.