The February 20, 2019 Peninsula reported that Qatar witnessed the highest valued IPO in 2018 in the MENA region with the listing of Qatar Aluminum Manufacturing Company (QAMCO) on the Qatar Stock Exchange (QSE), raising $745.6m in Q4.

Qatar leads MENA 2018 IPO activity in value

The Peninsula

FTSE Russell announced the entry of QAMCO to the FTSE Index within the first week of trading, owing to the positive response generated by the IPO (it was 2.5 times oversubscribed). The Qatar exchange has performed well in 2018 with prospects of inflows from investors tracking emerging-market indexes after the relaxation on foreign ownership curbs, the latest EY MENA IPO Eye report noted.

Phil Gandier (pictured), MENA Transactions Leader, EY, said: “The successful subscription of the Qatar Aluminum Manufacturing Company (QAMCO) reflects the strength of Qatar’s economy, and the government’s mandate towards supporting capital markets and privatization as it pursues diversification of the economy.”

The MENA region saw 26 IPOs raise $2,946.2m in 2018. Compared to 2017, IPO activity saw a decrease year-on-year with volume declining by 23.5 percent and value declining by 24.6 percent.

In the North African markets, Egypt, Morocco, Algeria, and Tunisia recorded eight deals for a total value of $381.6m in 2018.  Egypt recorded the highest number of deals with four IPOs in the year worth $276.5m, followed by Morocco with two IPOs worth $88m, while Algeria and Tunisia recorded one IPO each worth $9.5m and $7.6m respectively.

The IPO of Sarwa Capital on the Egyptian Stock Exchange raised $123.2m during Q4 2018. The government of Egypt delayed the sell-off of a 4.5 percent stake in the state-owned Eastern Tobacco Company owing to market volatility.  Many private IPOs tentatively planned for the quarter were also pushed to 2019 citing market volatility.

In Morocco, the IPO of Mutandis SCA raised $44.0m in Q4, making it the second IPO in 2018 on the Casablanca Stock Exchange.

The Algiers Stock Exchange witnessed the first SME to introduce its capital on the stock market, with the IPO of AOM Invest Spa raising $9.5m during Q4 2018. The Algiers Stock Exchange has opened the SME segment as part of the financial market’s modernization project, with the objective of increasing its contribution to the mobilization of savings and the financing of the economy.

Gregory Hughes, MENA IPO Leader, EY said: “While the capital markets in the MENA region are moving at a cautious pace, we saw a healthy diversification in sectors when compared to the dominance of REITs seen in the previous quarter of the year.  Despite current macroeconomic conditions, the MENA region witnessed 26 IPOs in the year, which is extremely encouraging.”

Globally, IPO activity continued to slowdown in Q4 2018, with 326 IPOs raising $53.7bn, marking a decrease of 34 percent and 10 percent respectively, compared to Q4 2017.  This can be attributed to current market volatility, oil prices and ongoing global trade issues which have delayed processes and left a lot of uncertainty regarding the execution of IPOs in the current environment.

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