Proceeds from global initial public offerings surged by 46 per cent in the second quarter of 2023, with the Asia-Pacific region, led by mainland China, contributing about 68 per cent of the total.
However, the first quarter of the year faced difficulties, with the lowest quarterly IPO proceeds since 2019, raising $25.7 billion through 234 floats, compared with $58 billion raised by 286 IPOs in the corresponding period last year.
The main drivers for the GCC region’s IPO growth include government incentives, foreign investor interest and diversification efforts.
Challenges may include global economic uncertainties, geopolitical factors and fluctuations in oil prices.
GCC stock market performance
The UAE and Saudi Arabia lead the region and have undertaken ambitious diversification efforts to reduce oil dependence and stimulate growth in non-oil sectors.
These strategic initiatives have significantly affected stock market performance, making them more attractive to investors.
This was evident in the robust increase in IPO activity, with the GCC region standing out globally.
GCC IPOs have thrived despite global challenges and the UAE and Saudi Arabia have played a significant role in this market, collectively raising $7.35 billion from 35 IPOs.
The UAE accounted for 54.42 per cent of the GCC’s IPO value, while Saudi Arabia led in terms of IPO volume, with 26 offerings year to date.
The region anticipates a strong IPO pipeline fuelled by government incentives and foreign investor interest, with more than 15 companies already announcing listing plans before the end of this year.
Overall, GCC stock markets recorded an impressive performance, with the MSCI GCC Index surging by 13.85 per cent in the past three years.
Success factors
Regulatory environment: This upswing can be credited to critical factors, including robust gross domestic product growth that attracts investors and reflects the region’s economic strength.
The GCC’s resilience to global geopolitical events has drawn passive index investments and favourable index weights for its stock markets.
Contrary to common belief, oil and gas contribute to less than 40 per cent of GDP in most Gulf countries, making up 30 per cent of the UAE’s economy and 18 per cent of Bahrain’s GDP in 2022.
The GCC economies displayed remarkable resilience and growth, with a robust 7.5 per cent expansion in 2022.
Investors were also enticed by the region’s FinTech advancements, offering digital trading platforms and technological innovations for enhanced accessibility.
Additionally, regional stock exchanges are expanding their reach, exemplified by the recent introduction of a futures market by the Dubai Financial Market.
Attracting the Muslim investor: Saudi Arabia and the UAE have developed robust Islamic finance sectors, offering various Sharia-compliant products, including Mudarabah (profit-sharing), Murabaha (cost-plus financing), and Ijarah (leasing).
Both countries have thriving Islamic fund industries, offering equity, real estate, fixed income and sukuk funds adhering to Sharia principles.
As Sharia-compliant bonds, sukuk are actively issued in both countries, attracting investors seeking Islamic investment options.
The Islamic insurance model, takaful, is widely available in Saudi Arabia and the UAE, covering various insurance types.
Introducing sukuk as an Islamic alternative to conventional bonds has broadened investment options and attracted a global investor base.
Enhanced market liquidity: The UAE, a regional leader, improved market infrastructure, including trading platforms and settlement systems, enhancing market efficiency.
Abu Dhabi’s investment holding company ADQ launched the Q Market Makers programme to grow liquidity on the Abu Dhabi Securities Exchange, while Dubai established xCube to promote market maker activities on the DFM to attract more capital.
Market-making companies have significantly increased market liquidity by offering continuous buy and sell quotes.
The DFM’s average daily trading volume reached Dh347.25 million in the first half of 2023, surpassing the volume from June to December 2022, which was Dh279.81 million.
These initiatives have led to institutional investors contributing approximately 78 per cent of the total trading volume, encompassing both buying and selling activities, in both markets since the beginning of the year.
Prospects and initiatives: The GCC’s IPO surge continues, driven by state-backed entities, government incentives, and foreign investor interest.
Initiatives like Qatar’s market-maker programme, Qatar Stock Exchange’s expansion plans, and incentives from exchanges like Saudi Exchange, ADX, and DFM will support IPO growth.
Introducing sukuk as an Islamic alternative to conventional bonds has broadened investment options and attracted a global investor base
Vijay Valecha,
chief investment officer, Century Financial
Privatisation efforts are set to bring non-state-owned entities and family businesses to the listings landscape.
In summary, the Middle East and North Africa region’s IPO outlook remains positive.
International investor perspective
International investors are increasingly drawn to the GCC stock markets due to robust economic growth and government reforms.
The opening up of these markets to foreign investors amplifies this interest.
GCC stock markets have recorded a strong performance driven by favourable factors, such as optimistic investor sentiment, evolving market trends, innovations and growing international interest shaping the landscape.
Vijay Valecha is chief investment officer at Century Financial
UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Killing of Qassem Suleimani
Killing of Qassem Suleimani
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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Drivers’ championship standings after Singapore:
1. Lewis Hamilton, Mercedes - 263
2. Sebastian Vettel, Ferrari - 235
3. Valtteri Bottas, Mercedes - 212
4. Daniel Ricciardo, Red Bull - 162
5. Kimi Raikkonen, Ferrari - 138
6. Sergio Perez, Force India - 68
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
UAE currency: the story behind the money in your pockets
PRISCILLA
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Company%20profile
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Suggested picnic spots
Abu Dhabi
Umm Al Emarat Park
Yas Gateway Park
Delma Park
Al Bateen beach
Saadiyaat beach
The Corniche
Zayed Sports City
Dubai
Kite Beach
Zabeel Park
Al Nahda Pond Park
Mushrif Park
Safa Park
Al Mamzar Beach Park
Al Qudrah Lakes
The bio
Date of Birth: April 25, 1993
Place of Birth: Dubai, UAE
Marital Status: Single
School: Al Sufouh in Jumeirah, Dubai
University: Emirates Airline National Cadet Programme and Hamdan University
Job Title: Pilot, First Officer
Number of hours flying in a Boeing 777: 1,200
Number of flights: Approximately 300
Hobbies: Exercising
Nicest destination: Milan, New Zealand, Seattle for shopping
Least nice destination: Kabul, but someone has to do it. It’s not scary but at least you can tick the box that you’ve been
Favourite place to visit: Dubai, there’s no place like home
Killing of Qassem Suleimani
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
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