GCC Capital Markets Watch - Q4 2023
2023 – Year in Review
- Positive macroeconomic backdrop
- 2023 IPO volumes on par with 2022
- Strong aftermarket performance for GCC
- Tadawul the most active exchange in the region
- Q4 the most active quarter of the year
Positive macroeconomic backdrop
GCC IPO market supported by resilient economic performance across the region with a positive outlook for the year ahead
- The global economy experienced a slower growth rate in 2023, marked by high interest rates, inflation and geopolitical tensions. Growth in the GCC countries remained remarkably resilient contributing to a positive IPO market conditions.
- The contraction in oil sector activities in 2023 resulting from the oil production cuts by OPEC+ was largely offset by expansion in the non-oil sector, buoyed by government investments linked to various economic diversification agendas taking place across the GCC.
- There are reasons to be optimistic about the potential economic performance of countries in the region in 2024, given their commitment to economic diversification and their ability to adapt to changing market conditions.
2023 IPO volumes on par with 2022
2023 on par with 2022 in terms of IPO volumes although a lack of large scale IPOs resulted in IPO proceeds less than half of 2022
- 47 IPOs raised USD 10.6bn in proceeds in 2023. In 2023 there were only two IPOs raising more than USD 1 billion whereas in 2022 there were seven, including USD 6.1bn raised by Dubai Electricity & Water Authority PJSC on DFM.
- The largest IPO of the year was ADNOC Gas Plc in Q1 2023 with USD 2.5bn raised on ADX. ADNOC Logistics and Services PLC also completed an IPO on ADX this year, raising USD 769m, the third ADNOC subsidiary IPO since 2021.
Strong aftermarket performance for GCC
Strong aftermarket performance for GCC IPOs contributed to significant levels of demand with high levels of oversubscription
- Approximately two thirds of all GCC IPOs saw their share price increase post IPO, with the top ten IPOs in terms of proceeds raised increasing by more than 50% on average.
- There were significant post-IPO gains from a number of KSA IPOs including; Jamjoom Pharmaceuticals Factory Company (+97%), SAL Saudi Logistics Services Co. (+92%) and Ades Holding Co. (+79%). Notable gains were also seen in the UAE with ADNOC Logistics and Services PLC gaining 107% post IPO.
- GCC IPOs were commonly oversubscribed throughout 2023, some notable IPOs included:
- Presight AI Holding Plc (ADX) - 136x
- Dubai Taxi Company PJSC (DFM) - 130x
- SA Saudi Logistics Services Co. (Tadawul) - 72x
- Jamjoom Pharmaceuticals Factory Company (Tadawul) - 62x times
Tadawul the most active exchange in the region
Tadawul the most active exchange in the region in terms of IPO volumes with 7 IPOs on the Main Market and 29 on Nomu, the parallel market
- 7 IPOs raised USD 3.0bn on Tadawul Main Market in 2023 including five privately held businesses, a privatization and a PIF portfolio company.
- Nomu, Tadawul’s parallel equity market with lighter listing requirements saw 29 IPOs in 2023 with a combined proceeds of USD 320m. The average amount raised on Nomu was USD 11m during 2023.
- Abu Dhabi Securities Exchange (ADX) also saw a number of IPOs with 6 IPOs raising USD 5.5bn, the highest proceeds across all of GCC exchanges.
Q4 the most active quarter of the year
As was the case in 2021 and 2022, Q4 was the most active quarter of the year accounting for 40% of IPO volumes and approximately 47% of full year proceeds
- Q4 included the IPO of OQ Gas Networks on the Muscat Stock Exchange (MSX) which raised USD 772m. 2023 saw the first major IPOs in the region in recent history and represents a key milestone in the government privatization agenda.
- Also in Q4 was another IPO resulting from a government privatization programme with the IPO of Dubai Taxi Company PJSC on DFM which raised USD 315m.
- Other notable IPOs in Q4 included:
- Ades Holding Co. - USD 1.2bn (Tadawul)
- SAL Saudi Logistics Services Co. - USD 678m (Tadawul)
- Pure Health PJSC - USD 986m (ADX)
- Investcorp Capital Plc - USD 451m (ADX)
- Phoenix Group PLC - USD 371m (ADX)
IPOs
2023 Highlights
“2023 was an encouraging year for IPOs with meaningful IPO issuance seen across a number of GCC countries, increasing international interest in the region, positive aftermarket performance and a resilient economic backdrop. Whilst the door to certain global IPO markets was generally closed in 2023, the door is expected to remain wide open for companies pursuing a listing in the GCC in 2024 supported by strong macroeconomic fundamentals.”
Muhammad HassanCapital Markets Leader, PwC Middle East.Top 5 GCC IPOs in 2023
- Exchange
- ADX
- Pricing date
- 13-Mar-2023
- Money raised
- USD 2.5bn
- Exchange
- Tadawul
- Pricing date
- 13-Oct-2023
- Money raised
- USD 1.2bn
- Exchange
- ADX
- Pricing date
- 20-Dec-2023
- Money raised
- USD 1.0bn
- Exchange
- MSM
- Pricing date
- 24-Oct-2023
- Money raised
- USD 0.8bn
- Exchange
- ADX
- Pricing date
- 1-Jun-2023
- Money raised
- USD 0.8bn
2018 - 2023 GCC IPO activity by country
- UAE accounted for 58% of 2023 IPO proceeds, the majority of which were from IPOs on ADX.
- KSA accounted for 31% of 2023 IPO proceeds, notwithstanding notably higher IPO volumes than other countries.
- Two IPOs from Oman, representing 10% of IPO proceeds, brought the country on to the radar in 2023.
- One IPO on the Qatar Stock Exchange in 2023 where technology company MEEZA QSTP raised USD 193m.
IPOs that took place in the GCC in 2023
IPOs Proceeds by Sector ($m)
- GCC countries are actively trying to diversify their economies to reduce reliance on natural resources. In 2023, 50% of IPO proceeds related to energy, utilities and resources sector companies providing signs of success on the diversification agenda.
- There was IPO activity across a range of other sectors in 2023, most notably consumer markets, health industries and TMT (technology, media and telecommunications) with each sector representing more than USD 1bn of IPO proceeds.
2023 GCC equity market performance
Source: Eikon (Thomson Reuter), PwC Analysis
- The DFM General Index and Tadawul All Share Index (TASI) ended the year 22% and 14% higher than 1 January 2023 respectively. There were gains across the majority of sectors on TASI as the diversification efforts to reduce oil dependence and stimulate growth in non-oil sectors begin to show signs of success.
- The Bahrain All share index ended the year 4% higher with a relatively stable year in an exchange does not typically see trading volumes as high as other exchanges in the region.
- In Qatar, the General Index saw declines of up to 15% in 2023 as economic growth normalised following the 2022 FIFA World Cup boom. Notwithstanding steep declines in Q4, the bourse ended the year where it started.
- A slide in oil and natural gas prices since September 2023 contributed to other GCC indices closing the year between 6% and 8% down from 1 January 2023.
Post IPO share price performance of top 10 GCC IPOs in 2023 (by proceeds)**
** Share price information as of 16 January 2024
Source: Eikon (Thomson Reuter), PwC Analysis
Bonds and Sukuks
2023 highlights
Top 5 GCC bonds in 2023 – by Proceeds
- Exchange
- Nasdaq Dubai
- Pricing date
- 15-Mar-2023
- Money raised
- USD 4.9bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 25-Sep-2023
- Money raised
- USD 1.4bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 15-Mar-2023
- Money raised
- USD 1.2bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 26-Oct-2023
- Money raised
- USD 1.0bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 20-Jan-2023
- Money raised
- USD 0.9bn
Top 5 GCC Sukuks in 2023 – by Proceeds
- Exchange
- Nasdaq Dubai
- Pricing date
- 14-Nov-2023
- Money raised
- USD 2.2bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 15-Mar-2023
- Money raised
- USD 2.0bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 4-Oct-2023
- Money raised
- USD 2.0bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 4-Oct-2023
- Money raised
- USD 1.8bn
- Exchange
- Nasdaq Dubai
- Pricing date
- 13-Sep-2023
- Money raised
- USD 1.5bn
PwC's Global IPO Watch 2023 and Outlook for 2024
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How PwC can help you
An IPO is a significant step and a transformational change. It’s best to do it in partnership with experts who’ve been through the process many times before, and who can provide the right people and skills you’ll need for the journey. At PwC, we have a dedicated IPO team to help you:
weigh up the pros and cons of an IPO
assess how ready you are for a listing
navigate every phase of the complex IPO process
prepare your business for life as a public company
Our team works on IPO readiness assessments, pre-IPO implementation services, IPO execution, project management, structuring advice and post-IPO support.
If required we are able to bring in experts from the wider PwC network to support areas such as; strategy, tax advice, management incentives, corporate governance and compliance.
Readiness - Getting ready for an IPO
Our IPO Readiness Assessment is a diagnostic review of the critical areas needed for a successful IPO so that management has a clear roadmap to deliver a successful IPO and operate as a listed business.
We’ll highlight where current processes, procedures, structures and practices fall short of regulatory requirements and best practices. We’ll also create a timeline to remediate any gaps, and form some of the habits of a successful listed company.
Execution - Making the IPO process run smoothly
Executing an IPO involves carefully orchestrating different teams that all need to work together to deliver the IPO, while making sure business as usual runs smoothly.
We’ll help you with this by providing end to end support to effectively and efficiently complete the filing process with the regulatory authority in addition to any pre-IPO implementation activities.
We can also act as your IPO diligence advisors performing the required due diligence, assisting with MD&A drafting in relation to a prospectus and giving you practical advice throughout the IPO process.
Authors
Muhammad Hassan
Capital Markets Leader, PwC Middle East
Danny Barclay
Director, Capital Markets, PwC Middle East
Contact us
Haitham Aljabry
Finance & Accounting Consulting, Partner, PwC Middle East
Tel: +966 54 732 2225
