Dubai – 6 November 2012: The month of July and August marked the start of the summer and Ramadan period with the expected slowdown in Initial Public Offering (‘IPO’) activity in the Gulf Corporation Council (‘GCC’) with lower available trading days and activity on the regional exchanges. The only listing witnessed in Q3 2012 was that of City Cement Company from Saudi Arabia which raised USD 252 million in mid September. This represented a marginal increase of USD 33 million or 13% in amounts raised compared to the same period last year where two IPOs in Saudi Arabia raised USD 219 million. Despite the relatively quiet third quarter performance, the 2012 year to date (YTD) results were significantly ahead by USD 857 million or 148% compared to 2011.
Steven Drake, Head of PwC Capital Markets in the Middle East region said: “Given the macro-dynamics of the GCC region, the summer and Ramadan months are generally slow in terms of IPO activity. We are seeing growing issuer interest in equity markets particularly in Saudi Arabia stimulated by improving oil prices, strong corporate earnings and continued infrastructure needs. We don’t expect to see significant activity in Q4 2012 although prospects for FY13 now look better than they had been.”
As anticipated in Europe, low activity in the first two months of this quarter reflected the traditional summer lull and London being quieter due to the Olympics. If recently announced transactions do successfully complete and perform well in the aftermarket, this will go some way to boosting investor confidence in European IPOs.
London saw a strong end to the quarter, with the Main Market IPO of Sberbank, the largest commercial bank in Russia, raising $5.2 billion through its offering of ordinary shares and global depository shares. The European IPO activity in 2012 YTD was rather disappointing, with a total of 48 IPOs raising USD 6.6 billion.
Unlike equities, the GCC bond market remained undeterred through the summer periods with a strong third quarter performance on both sovereign and corporate fronts. National Bank of Abu Dhabi issued a USD 750 million bond during the month of August which underpinned the strength of the debt market in the region. One of the significant sovereign issuances during the quarter was from the Kuwait Central Bank which issued a series of bonds amounting to a total of USD 5.4 billion.
The sukuk market continued to trend upwards during the quarter augmented by growing investor appetite for Islamic debt financing as the region continues to spend heavily on infrastructure development. Amongst the prominent issuances in the quarter was the sovereign SoQ Sukuk A QSC issuance which raised USD 4 billion in two tranches. On the corporate side, both Emaar Sukuk Limited and EIB Sukuk Company issued USD 500 million each.
Notes to editors:
1. About Capital Markets Watch GCC
Capital Markets Watch GCC surveys conventional bond and Islamic issuance and new primary market equity IPOs on GCC’s principal stock markets and market segments (including exchanges in Kingdom of Saudi Arabia, Kingdom of Bahrain, Kuwait, Sultanate of Oman, Qatar and the United Arab Emirates) on a quarterly basis. This survey was conducted between 20 September 2012 and 30 September 2012 and captures the relevant data based on their transaction date. Capital Markets Watch GCC is prepared by PricewaterhouseCoopers Middle East (www.pwc.com/middle-east). All market data is sourced from publically available information and has not been independently verified by PricewaterhouseCoopers.
2. About IPO Watch Europe
IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK) on a quarterly basis. Movements between markets on the same exchange and greenshoe offerings are excluded. IPO Watch Europe is prepared by PricewaterhouseCoopers LLP (www.pwc.com/uk) a limited liability partnership incorporated in England. PricewaterhouseCoopers LLP is a member firm of PricewaterhouseCoopers International Limited. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.
IPO Watch Europe Surveys and annual reviews are available at: http://www.pwc.co.uk/eng/publications/IPO_Watch_Europe_previous_editions.html
3. About the PwC Capital Markets and Accounting Advisory Services Team in the Middle East
The Capital Markets and Accounting Advisory Services Team in the Middle East is part of the PricewaterhouseCoopers global network of capital markets specialists who provide a broad range of advisory services to companies and investment banks in connection with capital market transactions. These include preparations for becoming a public company, selecting the right market and advisory team, assisting with reviewing accounting policies and GAAP conversion projects, advising on regulatory issues and undertaking financial and business due diligence investigations.
4. About PwC
PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
Established in the Middle East for 40 years, PwC has firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar, Saudi Arabia and the United Arab Emirates, with around 2,500 people. (www.pwc.com/middle-east)
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
©2012 PricewaterhouseCoopers. All rights reserved