Middle Eastern economies need to move beyond conventional financing and focus on IPOs, say experts
Experts from the region had claimed at the start of this year that 2015 will see increased stock market activity in terms of public issuances following the 27 IPOs that raised US$11.5 billion in 2014, the best performance recorded since the financial crisis.
Government efforts in easing regulations and policies related to listings coupled with increased cross-sector spending to encourage economic diversification, the corollary of which was a rise in investor confidence, have been impacted due to the oil price volatility in recent times.
According to Dr. Obaid S. Al Zaabi, DCEO Listing, Disclosure & Legal, Securities and Commodities Authority and Chairman of the Arab IPO Summit, “In order to ensure long-term financing in regional markets, it is imperative for the market to achieve the balance between conventional investors and IPOs as an ultimate source to raise capital. The UAE has already made significant progress in line with this approach with financial market regulators initiating significant developments recently to promote the local IPO markets and support its growth.”
Rashid Al Mansoori, CEO and Board Member, Qatar Stock Exchange said, “The GCC has historically witnessed fewer IPOs than other notable markets. As we all look to diversify our economies, developing our relatively young capital markets and providing more financing opportunities for capital-hungry companies is important.”
“IPO activity in H1 2015 was driven by the IPO of several companies from Egypt and Saudi Arabia. We are likely to see several companies re-initiating or executing IPO plans in H2 2015, driven by increased market confidence and regulatory reform,” said Mayur Pau, MENA IPO leader, Ernst & Young, MENA.
The Arab IPO Summit is set to be held from 14 to 17 September 2015 at Taj Dubai Hotel in Dubai. For more information visit www.arabiposummit.com