GCC IPO+ Watch

Global equity markets impacted by macroeconomic headwinds and geopolitical turbulence

• Global markets sold off at the beginning of April following the announcement of US tariffs, with many indices dropping by as much as 15% and volatility climbing to levels last seen during the early stages of the pandemic.
• Unsurprisingly, the optimism in global IPO markets seen earlier in the year, particularly in the US with its busiest start since 2021, quickly faded and global IPO activity stalled as some companies chose to pause their IPO processes.
• The remainder of the second quarter, however, has been a period of recovery for global equities, driven by a 90-day pause on tariffs and more positive news around potential trade deals, which sparked a relief rally. Volatility also reduced to more normalised levels, allowing major equity indices to rebound and close higher for the first half of 2025.
• The stabilisation of the equity markets towards the end of the second quarter led to the gradual reopening of selective IPO markets, with issuers looking to restart IPO preparations. However, sentiment remains fragile, and continued recovery is highly dependent on macroeconomic and geopolitical stability.

Source: S&P Global

Mixed performance across GCC equity markets in Q2

• Equity markets across the GCC delivered mixed performance in Q2 2025, with most exchanges rebounding from early-quarter declines though some remained under pressure due to sectoral headwinds and commodity-driven volatility.
• In the UAE, both the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) posted strong recoveries, gaining 7% and 15% respectively over the quarter. This rebound followed sharp market corrections in early April and was underpinned by broad-based sectoral strength.
  
  • On the DFM, real estate stocks which comprise over 50% of total market capitalization led the gains, supported by continued demand in Dubai’s residential and commercial segments.
  • Financials and industrials also contributed meaningfully to the index’s upward momentum, buoyed by upbeat earnings releases and improving forward guidance.
• Kuwait’s benchmark index advanced 8% during Q2, reflecting sustained foreign inflows and robust earnings across the technology, financial services, and healthcare sectors.
• In contrast, the Tadawul All Share Index (TASI) declined by approximately 6% over the quarter, weighed down by falling crude prices and investor risk-off sentiment. With energy and related sectors representing over 30% of TASI’s composition, the index was particularly vulnerable to the ~20% drop in Brent crude.
• Across the broader GCC, equity indices posted modest gains between 1% and 6%. Market performance remained closely tied to external macroeconomic dynamics including commodity trends, global interest rates, and geopolitical developments.

Source: LSEG

Q2 2025 GCC IPO proceeds broadly on par with Q2 2024 despite market volatility

• $2.3 billion was raised from 4 IPOs (excluding Nomu) in Q2 2025 representing a slight decrease from $2.6 billion raised from 8 IPOs in Q2 2024.
• Whilst there were fewer IPOs in Q2 2025, proceeds were broadly on par due to three listings each raising in excess of $500m.
• Tadawul’s Nomu Parallel Market remained active, with 8 listings generating $128 million in the quarter, an increase from $81 million raised from 5 IPOs in Q2 2024.
• GCC IPO activity was muted outside of the KSA with just one IPO in the UAE during the quarter.

Flynas IPO and Dubai REIT Listing signal sectoral shifts in GCC capital markets

• Flynas’ IPO on Tadawul was the headline event of Q2 2025, marking the first IPO of a GCC-based airline in more than 15 years. The successful listing not only underscored investor confidence in the region’s aviation sector but also set a precedent that could encourage other regional carriers to follow suit.
• Dubai Residential REIT’s debut in Q2 2025 marks a landmark moment for the UAE, representing the first new REIT listing since Emirates REIT’s launch in 2014.
• Positive momentum continued in Healthcare sector IPOs with Specialized Medical Co. raising $500m in June.

Whilst the pipeline is strong, the direction of the IPO market for the remainder of the year will depend on market stability

• The long-term outlook for the GCC IPO market remains promising. A recovery of the equity markets in Q2, stabilisation of volatility and strong pipeline contributing factors to this promising outlook. However, it will highly depend on the global macroeconomic and geopolitical stability.
• As we enter Q3 which itself is typically a quieter period for IPO activity there is cautious optimism for the final quarter of 2025 and into 2026 as a diverse pipeline of issuers across the GCC gear up to go public, subject to favourable market conditions.

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