Gulf Capital (GC), one of the Gulf region’s leading private equity firms, released today its Initial Public Offering (IPO) report for the first quarter of 2008.
IPOs issued in Gulf Cooperation Council member countries have recorded an increase in recent years, rising from a total of 23 IPOs in 2006 to 33 in 2007. During the first quarter of 2008 a total of eight IPOs were completed, remaining unchanged when compared to their number in the same period last year.
IPO managers have been appointed to manage a total of 48 IPOs which will be launched between 2008 and 2010, while 64 other companies have announced plans to issue an IPO. This will increase the number of IPOs scheduled for the said period to 120, with a combined value of $20.3 billion, which compares to 83 IPOs reported for the same period ending by end 2007, whose combined value did not exceed $10 billion. These statistics underline an accelerated growth in the value of IPOs during the first quarter of 2008, which suggests that by the end of the current year the value of initial public offerings will exceed that of the IPOs made in 2007, which stood at $12 billion.
The value of IPOs in the first quarter of 2008 exceeded that of last year’s by 351%, to rise to $4 billion, compared to $900 million in 2007. According to available information, the value of initial public offerings is forecast to surge by 80% in the current year, compared to 2007.
The report also revealed that while IPOs have in the past been limited to specific sectors, such as financial services, oil and gas, and real-estate, studies now indicate that future IPOs will spread over a larger number of sectors to include construction, transportation, telecommunications, media, education and others.
Saudi Arabia was home to five out of the eight IPOs launched during the first quarter of 2008, with a combined value of $3.3 billion. Meanwhile, the UAE accounted for two IPOs, with a total value of $176 million, and one IPO worth $511 million was launched in Qatar.
GCC financial markets witnessed a noticeable slowdown during the first quarter of 2008, registering marginal growth of only 0.8%. Except for Saudi Arabia and Abu Dhabi, the GCC markets concluded the first quarter of 2008 with a positive outlook. Nevertheless, the IPOs launched in the past two years appreciated by up to 159% compared to the issuance value.
Gulf Capital based its report on its own research, as well as on reports released by Zawya, International Monetary Fund, in addition to indexes of Nasdaq, Tadawul, NBAD, DSM, KSE, MSM-30, and BSE.