Ahmed Hatem / Anatolia
The Financial Group Hermes (private) said that the volume of initial public offerings in the Gulf region amounted to $21 billion this year, representing 23 percent of the total global subscriptions amounting to $91 billion.
Hermes, which is listed on the Egyptian Stock Exchange, stated in a report, Monday, that the increase in the volume of subscriptions is an achievement compared to the numbers of 2021, when subscriptions amounted to only 2 percent, or $10 billion, of the global total.
The report indicated that the conflict between Russia and Ukraine aroused exceptional interest among investors in the Gulf region, especially investors who focus on emerging markets.
The note indicated that the real change came in the UAE, where 12 companies entered the market in 2022, raising $11 billion.
The Dubai Financial Market witnessed the listing of Dubai Electricity and Water Company (DEWA) in March in the largest initial public offering in the Gulf states this year, raising $6.1 billion at an ideal time, when the interest of global investors was rapidly shifting from Russia to the countries of the region.
DEWA is now the largest by market capitalization on the Dubai Stock Exchange.
“Local investors in the region face a trade-off, either they stay invested in IPOs and the broader market or they take some money off the table and put it in bank deposits,” the report continued.
The four major Gulf countries – UAE, Saudi Arabia, Kuwait and Qatar – make up more than 7 percent of the total MSCI Emerging Markets Index.
At the same time, volatility in global financial markets reduced IPO activity outside the region, and Gulf companies were able to sell shares at high valuations, according to the report.
Hermes expected the initial public offering for 2023 to be very strong, amid governments and private companies keenness to sell shares.
The economies of the Middle East, which depend on energy exports, particularly the Gulf states, have flourished, amid rising global demand for oil and gas and a recovery in global prices.
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