Abu Dhabi: UAE’s financial markets witnessed 11 initial public offerings in 2022, which raised Dh51.2 billion, increasing the depth of the country’s bourses, enhancing their investment potential and attracting a new segment of investors.
The IPOs, which saw total demand reach Dh1.454 trillion, have helped UAE and the region becoming a bright spot in an otherwise bleak global IPO market.
Several local companies are proceeding with their plans to list on the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) in the coming years, as UAE markets have so far shown resilience in the face of global volatility following the record success of IPOs in 2022, complementing the IPOs witnessed in 2021, including Fertiglobe, Adnoc Drilling, Alpha Dhabi and Multiply Group.
The Dubai Electricity and Water Authority (Dewa) came out on top with a total revenue of Dh22.3 billion with the number of shares available in the public offering reaching nine billion, representing 18 per cent of the company’s capital, while Borouge’s offering achieved total revenues of more than Dh7.34 billion.
Americana raised Dh6.62 billion in gross proceeds in its historic IPO on the ADX and Saudi Arabia’s Tadawul, while Abu Dhabi Ports succeeded in attracting new capital from the IPO with returns of Dh4 billion.
Meanwhile, Dubai’s toll operator Salik raised over Dh3.7 billion from its IPO on the DFM, while Empower raised Dh2.7 billion, TECOM Group Dh1.7 billion, Burjeel Dh1.1 billion, Taaleem Dh750 million and Bayanat Dh628 million.
Middle East’s IPO frenzy
Listings in the region have fetched $22.6 billion this year, Bloomberg said earlier this month.
The Middle East frenzy - which has seen 42 regional listings in just over 11 months - is all the more significant given that new offerings are almost at a standstill in other financial centres as market volatility and rising interest rates impact deals. As listings dwindled in London, Hong Kong and New York, the UAE and Riyadh emerged as new IPO hotspots buoyed by high oil prices and investor inflows.
Globally, IPOs are heading for their longest drought since the global financial crisis, and this year’s listings slump is the worst since IPO values tumbled 73 per cent in 2008, according to Bloomberg data. It follows a 2021 boom, when peaking stock markets and a US blank-check listing craze led to an unprecedented $655 billion IPO haul. Since then, however, high-growth tech companies without a path to profitability have lost favour while consumer firms are finding investor support lacking as inflation surges.
The US IPO market has been one of the biggest drags, hit by a collapse in the blank-check deals that were behind 2021’s surge. Listing volumes of $24 billion are the lowest since 1990 and down 93 per cent over 2021, with bankers saying that investors will favor stable companies flotations next year.
The two markets that did well in 2022 - China and the Middle East - are likely to continue to do so in 2023 as well, bankers say.
With inputs from WAM and Bloomberg