Public listings on Mena markets set to go up in 2021, EY says

More companies in the centre East and North Africa are anticipated to go public on 2021 after the number of listings and money raised dropped this past year, based on the consultancy EY.

Renewed optimism for a gradual pick-up in public areas offerings in regional markets is definitely driven by regulatory shifts that support open public companies, EY explained in a written report on listings in the region. The consultancy expects a lot more than 10 original public offerings (IPOs) in Saudi Arabia this season and accelerated listing ideas by non-public and state-owned corporations in Egypt.

"As 2021 begins, we believe that continued fiscal stimulus procedures, a good amount of liquidity, and developing confidence in Covid-19 vaccination programmes will sustain great IPO momentum," Matthew Benson, EY Mena strategy and transactions head, said.

In 2020, the Mena region documented nine IPOs that elevated $1.86 billion, a 40 per cent drop altogether issuances and 94 per cent decline altogether proceeds in comparison to 2019. Six of the nine IPOs had been in the real estate sector, with the rest in healthcare, client stables and insurance sectors, according to the report.

Despite a subdued year, the fourth one fourth of 2020 saw a rebound in activity after a quiet second one fourth and one IPO in the 3rd one fourth, with four IPOs in Mena raising a complete of $925 million.

“A decline in financial expansion and significant disruption across many industries due to the Covid-19 pandemic, as well as a reduction in demand for essential oil, had a considerable impact on Mena inventory performances in 2020," Mr Benson said.

This season, however, the outlook for IPO markets in the Gulf appears promising, according to EY.

Saudi Arabia is likely to see more than 10 listings in 2021 - with significant development being the region’s largest exchange, Tadawul, preparing for its own IPO through the year.

"The outlook for the kingdom’s markets remains great for 2021 and as Tadawul continues its growth and status in the foreign capital market segments, it proves to be a significant avenue for investors seeking to deploy domestic capital," Abdulrahman Moulay Albizioui, EY Saudi Arabia strategy and transactions leader, said.

The UAE, which made regulatory overhauls last year to further motivate listings on the local markets, is also likely to see an uptick in IPOs.

"The 2020 amendments to the Companies Law bode very well for the entire development of the capital marketplace in the UAE," Alison Hubbard, EY Mena law leader, said.

"Increased overall flexibility in foreign ownership, alterations to the nationality requirements of board members and the upsurge in the proportion of share capital that owners might now sell, to mention a few, are expected to lead to a rise of IPO candidates in the Emirates."

IPO activity can be expected to rise Found in Egypt, with numerous issuers in the pipeline, EY said.

"Looking ahead, private together with state-owned companies are anticipated to play a larger role found in accelerating their IPO plans found in 2021," Sherif El -Kilany EY country managing partner for Egypt, explained, adding that the rollout of Covid-19 vaccines may also help help momentum.

Globally, IPO numbers were up 19 % in 2020, while proceeds increased 29 %, from 2019. This past year saw 1,363 IPOs with total proceeds of $268.0bn, the best proceeds since 2010, when $290.2bn was raised through 1,361 listing deals.

In 2020, the virtually all dynamic sectors were technology, industrials and health care, which accounted for 59 per cent of global IPO deals and 64 per cent of proceeds.