Dubai: Overall initial public offering activity in the GCC has slowed down in recent months, underlining poor investor appetite resulting from political instability in some parts of the Middle East and volatility in global equity markets, a new report has showed.

The aggregate value of IPO offerings declined by 86 per cent in the second quarter of the year, which saw three new listings raising a total of only $48 million (Dh176 million), a far cry from the $337 million recorded in the first three months of 2013.

When compared year-on-year, the average IPO offering value witnessed a more significant decline — about 94 per cent in the second quarter of 2013 compared to the same period in 2012 — which saw four IPOs registering an aggregate of $1.1 billion, according to a report by PricewaterhouseCoopers (PwC) released on Monday.

“Concerns looming over the economic slowdown in certain global markets and the elevated political instability in Egypt and other countries in the Middle East would appear to have dampened investor appetite and contributed to the low offering values we have seen this quarter,” said Steven Drake, head of PwC’s capital markets business in the Middle East.

Drake said the subdued mood in the region’s equity markets is likely to continue until the global markets, as well as the political situation, stabilises. However, there are still companies who are looking to list within the next 12 to 18 months.

Analysts said that IPO activity in the Gulf Cooperation Council tends to slow down during the summer months and Ramadan period, when trading days and activity on the bourses are quieter. “Given the macro-dynamics of the GCC region, the summer and Ramadan months are generally slow in terms of IPO activity,” Drake had said.

A Deutsche Bank research last November, however, noted that IPO activity in the region has been slowing down in recent years, with less than 10 IPOs raising around $1 billion a year. Between 2005 and 2008, the region saw about 20 IPOs raising between $6 and $12 billion annually.

Although public listings in the region don’t look very encouraging, Daman Investments had predicted that the UAE’s stock exchanges would achieve double digit earnings growth this year as the general macro environment in the country has shown positive signs.

In the recent quarter, the most significant listing in the region was that of the Abu Dhabi-based Al Noor Hospitals Group, which listed 33 per cent of its equity on the premium segment of the London Stock Exchange, pushing the total proceeds to $342 million.

While the GCC region’s IPO activity is in a subdued mood, initial public offerings in Europe have gained momentum in the second quarter of the year.

In the latest quarter, Europe’s IPO markets witnessed offerings valued at $6.8 billion, a 58 per cent increase on the $4.3 billion raised in the first three months of 2013. A huge chunk of the IPO proceeds, about 81 per cent, was generated from the top ten deals.