The Saudi Stock Exchange, also known as the Tadawul, in Riyadh. Image Credit: File photo

Dubai: Saudi Arabia led the primary market activity in the second quarter with three deals worth $1.023 billion led by privatisation activity, according to data published by Ernst and Young.

Arabian Centres Company Limited, one of the largest IPOs in the country with proceeds of $658.7 million, was the first IPO that allowed the sale of securities to qualified institutional buyers in the United States. Maharah Human Resources Company and Shuaa REIT Fund raised IPO net proceeds of $207.0 million and $157.7 million respectively.

Overall MENA IPO deal value increased by 222.6 per cent to $2,822.5 million in the second quarter of 2019, up from $874.9 million in the same quarter last year. Six deals were recorded in second quarter of 2019, including one REIT listing, a decrease of 33.3 per cent from the nine deals listed in Q2 2018.

The second quarter of the year witnessed a sizeable improvement in IPO activity, both in volume and value, when compared to a single IPO that raised US$57.6m in Q1 2019.

“The increase in IPO activity across the MENA region during the second quarter of this year, which included two cross-border listings, is proof that companies are still keen to execute IPOs and gain access to international investors and stock markets. The IPO deal value raised in the first half of 2019 has already nearly surpassed the total deal value raised in 2018,” Gregory Hughes, MENA IPO Leader, EY, said in a statement.

The United Arab Emirates witnessed the cross-border listings of two fintech companies on the London Stock Exchange, raising net proceeds of $1.797 billion in the second quarter of 2019. Network International Holdings Limited raised $1.40 billion when listed in April and Finablr PLC raised $397.9 million with its listing in May.

“Across the MENA region, IPO activity is expected to progress cautiously, with an optimistic outlook owing to events and themes such as the MSCI and FTSE inclusions, privatization drives, and government initiatives,” Gregory added.

Global IPO activity

Global IPO exchange activity continued to pick up in the seocnd quarter of 2019, with 302 IPOs raising $56.8 billion, marking an increase of 47.3 per cent in IPO volumes compared with first quarter of 2019, despite the US-China trade tensions and uncertainties related to Brexit. Health care, technology, and the industrial sector remained the top three sectors by the number of IPOs issued during the second quarter.