According to a recent economic report, in the second quarter (Q2) of 2024, initial public offerings (IPOs) in the UAE markets raised USD 890 million.
Alef Education, which raised USD 515 million on the Abu Dhabi Securities Exchange (ADX), and Spinneys, which raised USD 375 million on the Dubai Financial Market (DFM), were two of the biggest initial public offerings (IPOs) in the United Arab Emirates during the second quarter, according to PwC Middle East’s most recent IPO+ Watch.
Saudi Arabia was the leader in the Gulf region in terms of IPO activity reaching USD 1.6 billion, or 61% of all IPO activity in the region in Q2 2024. This quarter also saw the first initial public offering (IPO) on the Boursa Kuwait in two years, with USD 147 million raised by Beyout Investment Group Holding Company.
Notable IPOs on the Saudi Arabia stock market during the quarter included the IPO of Dr. Soliman Abdel Kader Fakeeh Hospital Company, which raised USD 763 million on the Tadawul stock exchange.
According to the report, this quarter’s IPO activity was observed in a number of different sectors, including technology, media, and telecommunication (USD 515 million), consumer markets (USD 530 million), financial services (USD 256 million), energy, utilities, and resources (USD 148 million), industrials, manufacturing, and automobile (USD 407 million), and health industries (USD 774 million).
A strong demand for financial products that comply with Sharia law was evident from the report, which highlighted the significant number of Sukuk issuances that occurred during the quarter, raising over USD 10 billion as opposed to USD 2.6 billion in the same period last year.
Companies in the fields like technology, healthcare, and real estate sectors are especially showing interest in exploring IPO opportunities, as the Gulf nation’s regulatory framework has also evolved to support this trend, providing a supportive environment for companies to enter into an IPO and list their shares.
“The technology sector has seen a surge in IPO activity, driven by the increasing demand for digital solutions and the UAE’s ambition to become a global tech hub. Healthcare companies are also looking to go public to raise funds for expanding their services and investing in advanced medical technologies. Meanwhile, the real estate sector continues to attract investors due to the UAE’s growing population and the demand for residential and commercial properties,” stated Simon Gordon, the managing director of Sovereign PPG Corporate Services, while interacting with the Middle East Economy.
“In the past decade, the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have witnessed significant milestones, with an increasing number of listings and higher trading volumes. Thanks to regulatory changes that allow greater foreign ownership and participation, the markets have also become more accessible to international investors,” he stated further.
“Currently, the UAE stock markets are experiencing a bullish phase, driven by strong corporate earnings, high oil prices, and increased government spending on infrastructure projects. IPO interest and growth have further fuelled this upward trend, with new listings attracting substantial investor demand and driving up trading activity,” Gordon noted, while stating that by going public, companies are enjoying advantages like having access to a new revenue stream and an influx of capital, which can be used for expansion, debt reduction, or investing in new projects. The IPO route is also enhancing the company’s visibility and credibility, which can attract more customers and business opportunities.