GCC Capital Markets Watch - Q2 2022

Regional Activity

Q2 2022 is the best-performing quarter by proceeds since the listing of Saudi Aramco in Q4 2019, surpassing new highs set in Q1 2022.

The Kingdom of Saudi Arabia generated USD585 million from 5 IPOs, generating 7% of Q2 2022 GCC proceeds. Retal Urban Development Co was the biggest IPO on Tadawul for the quarter, raising USD384 million, followed by Saudi Home Loans which generated USD160 million.

Although IPOs on Tadawul were not as active in Q2 2022 as the previous quarter, Saudi Arabia still outperformed many other countries on a global scale, ranking 5th globally and generated 2% of the global proceeds. More 2022 IPOs are expected for the Kingdom. The Q3 2022 pipeline appears strong with 5 companies already in advanced stages of the IPO process.
Q2 2022 is a phenomenal quarter for the United Arab Emirates. The listing of the Dubai Electricity and Water Authority (“DEWA”) on DFM represents the first of the 10 state owned entities in Dubai to be listed following the Dubai government’s mandate. At USD6.1 billion proceeds and 37 times oversubscribed, this is the UAE’s largest listing on record and was the largest IPO in Q2 2022 globally, signifying a reactivation of the UAE IPO market.
Abu Dhabi has also contributed significantly to the strong Q2 IPO activity of the country. Abu Dhabi’s Borouge listed on ADX generating USD2 billion in proceeds. This is the largest listing on ADX since 2017. ADX also hosted the UAE’s first SPAC listing of ADC Acquisition Corporation PJSC generating USD100 million. ADC Acquisition Corporation also listed warrants in conjunction to its IPO. These transactions led UAE to be the country with the most IPO proceeds globally in Q2 2022, surpassing Saudi Arabia and even USA. The outlook for the UAE remains positive for Q3 2022 and beyond. TECOM already completed its IPO in July 2022 and that of RTA announced and underway. ADX chairman indicated there could be 13 new listings on ADX by year end. This initiative is intended to help boost the market value of the exchange to AED3 trillion.

Whilst Oman did not host any IPO in Q2 2022, it is expected to show increased IPO activity in the near future. Oman Investment Authority (OIA), which is seeking to exit numerous assets across various sectors, including two units of State energy company OQ, through potential listing on the Muscat stock exchange. This exit represents OIA contribution towards realizing Oman’s Vision 2040 to achieve economic diversification, decrease oil dependence and empower the private sector.

There were no IPOs in Kuwait in Q2 2022. However, family-owned automotive business Ali Alghanim has completed a private listing on Boursa Kuwait. Qatar also had no IPO activity in the quarter.

GCC IPO market had been very active in Q2 2022, even when compared to a strong Q1 2022. The momentum is expected to continue into Q3 2022 with a number of high profile companies in the pipeline.

The debt market also experienced a high level of activity in Q2 2022. 

UAE listed USD400 million worth of treasury bonds on its Nasdaq exchange. The Government of Bahrain issued a bond valued at USD395 million. The Government of Qatar listed treasury bills with a value of USD302 million. A number of bonds that have been listed on the London Stock Exchange, such as those issued by Sweihan Power and Abu Dhabi National Energy Company, also started their secondary listings on ADX.

The biggest corporate bond issuer in Q2 2022 was Industrial and Commercial Bank of China Limited, with issuances in the quarter totaling USD2.7 billion.

The UAE’s Nasdaq Dubai continued to be the leading sukuk exchange. During the quarter, the Indonesian government listed multiple sukuks totaling USD3 billion and IsDB Trust Services No.2 SARL - 2027 listed a USD 1.6 billion sukuk.  Exchange hosted the largest corporate and sovereign sukuk listings in Q2 2022 in the GCC region.

Share price performance of 2019, 2020, 2021 and 2022 GCC IPOs* by sector, relative to the respective all share index, from the IPO date to 30 June 2022

Source: Eikon (Thomson Reuter), PwC Analysis

^{The percentage figures shown in the chart above are the average share price movements of the newly listed companies under each sector relative to the index performance of the respective exchange.}

^{* The IPOs of Al Moammar Information System Company, Sprinkle Holding BSC and Oman reinsurance have been excluded due to insufficient data.
** The increase is mainly contributed by an increase of 2555% in the share price of Boursa Kuwait Securities Company (K.P.S.C.). If Boursa Kuwait Securities Company (K.P.S.C.) is excluded, the increase would be 16%.}