DOHA: The Gulf Cooperation Council (GCC) equity markets continued to witness healthy primary market activity in last year with steady growth in Initial Public Offering (IPO) volumes and proceeds during the year.
With resilient investor demand as seen in the several large cap IPOs in 2024 and GCC governments continued push to diversify economy and deepen capital markets, the pipeline of offerings in 2025 remains resilient in the region. Based on the status of IPO offering, there are around 40 IPOs already in the pipeline in the GCC, with 30 IPOs already announced, according to a report by Kamco Invest.
The GCC exchanges witnessed a total of 53 IPOs during 2024 with the bulk of the companies listing in Saudi Arabia. This was the highest number of IPOs in the region and a healthy growth from 46 IPOs in 2023. The growth came despite marginal growth in the aggregate GCC index during 2024 for the second consecutive year as the performance was affected by a number of external factors including geopolitical issues, decline in oil price and elevated interest rates.
In terms of proceeds, GCC issuers raised $12.9bn during the year, a 19.8 percent gain as compared to the proceeds of $10.8bn in 2023 and the second highest proceeds over the last five years, based on data from Bloomberg and stock exchanges. The increase in proceeds came despite issuance numbers being driven by smaller-ticket IPOs.
In terms of performance post listing, bulk of the companies reported gains by the end of the year. As per data as of end of year, 31 companies showed gain in share price since listing while 21 posted declines. Nevertheless, the performance of companies post listing was also affected by the prevailing issues in the
region.
Gainers, on the other hand, reflected niche offerings in the region including in sectors like Software and Services, Healthcare, and Utilities with solid business fundamentals with future growth and attractive dividend yields. Moreover, the list of gainers mainly included private issuers as against companies that were privatized by the government as seen over the last few years.
In terms of size of the IPOs, the GCC remains a hotspot with the combined region ranking fourth globally after China in terms of total IPO proceeds.
The sectoral trend in IPOs during 2024 showed the impact of emerging technologies as TMT topped in terms of number of IPOs during the year. Industrials and Consumer sectors were next with the top three sectors accounting for 60 percent of the total IPOs in terms of volume and proceeds.
The Global IPO activity plunged for the third year in a row with decline in both number of deals as well as IPO proceeds. Total number of IPOs reached 1,199 during the year, as per data from LSEG, as compared to 1,305 deals during 2023.
