MENA IPO Eye. MENA IPO market starting to realize its potential. Saudi Arabia tops the MENA IPO market Q2 2014

Transcription

1 MENA IPO Eye Q2 214 Mayur Pau MENA IPO Leader The MENA IPO Eye is a quarterly publication covering the MENA IPO Through the publication, we intend to highlight outlook of IPO activity in the region that could add to the insights for those MENA IPO market starting to realize its potential H1 214 and Q2 214 saw the most capital raised and the highest volume of IPOs since 29 The initial public offering (IPO) activity in the Middle East and North Africa (MENA) region witnessed Saudi Arabia tops the MENA IPO market Q2 214 MENA IPO activity is spread broadly across sectors during Q2 214, with power and utilities Q2 214, the region s largest issue relating to Abdul Mohsen Al Hokair Group of Saudi Arabia. Highlights from the Q1 214 MENA IPO Eye edition with Q1 213

2 Company Domicile Sector Amount raised (US$m) Date of IPO closure Listing date* Exchange** Saudi Arabia Health care - Saudi SE Power and utilities Muscat SM SAOG Power and utilities Muscat SM SAOG Maghreb International Tunisia Services Tunisia SE Publicité Abdul Mohsen Al Hokair Saudi Arabia Saudi SE Group Morocco Food and beverages May Tawasol Group Holding Tunisia May May 214 Tunisia SE Egypt 13 May 214 Egypt SE Saudi Arabia Saudi SE UAE Retail April Dubai FM UAE 3 April 214 NASDAQ Dubai Total 1,14.8 Current state of play The MENA IPO activity in Q2 214 witnessed the highest in the past six years. All of the IPOs executed during Q2 214 were is driving IPO activity in the region. Consistent with global IPO trend The trend in MENA IPO activity was consistent with global IPO in H during MENA IPO Eye Q2 214

3 MENA IPO activity (211 H1 214*) Capital raised (US$m) 3,5 3,72. 3, 2,5 26 2, , 15 1,972. 1, , H1 214* Volume Capital raised (US$m) Volume (No. of IPOs) MENA IPO quaterly activity (Q1 211 Q2 214) Capital raised (US$m) 2, 1,5 1, , , , ,14.8 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14* Capital raised (US$m) Quarter 9 Volume (No. of IPOs) Volume Global IPO quaterly activity (Q1 211 Q2 214) Capital raised (US$b) Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14** Quarter Capital raised (US$b) Volume (number of IPOs) Volume MENA IPO Eye Q

4 Key trends impacting MENA IPOs MENA economic growth is expected to pick up in 214 production. According to the International Monetary Fund (IMF), the MENA region is expected to register a GDP growth of 3.2% in MENA GDP growth (%) GDP growth (%) 1.. Source: IMF and EY analysis Note: *f forecast MENA GCC MENA oil exporters f* 215f* 4.2 MENA oil importers The MENA oil exporting countries are expected to lead GDP share of non-oil output in total GDP. Regional stock market undergoing pre-ramadan correction of last year in 214. However, the regional exchanges have gone through a correction after their high in May 214. The corrections have been attributed to the effect of geopolitical crises in Iraq Stock market Market capitalization (US$b) Index return (YTD in %) Abu Dhabi SE 4% Bahrain SE 14% Dubai FM 14% Kuwait SE Muscat SM 2% Qatar SE Saudi SE 1% Egypt SE % 1% Tunis SE 4% Source: Zawya Dubai Financial Market has been volatile during the year, with The stock exchanges of Bahrain and Saudi Arabia have been relatively stable during the period, while the Kuwait stock exchange 4 MENA IPO Eye Q2 214

5 Regional stock market performance YTD 214 (%) 6% Market return (% change) 4% 2% % -2% January 214 February 214 March 214 April 214 May 214 June 214 Abu Dhabi SE Bahrain SE Dubai FM Kuwait SE Muscat SM Qatar SE Saudi SE Egypt SE Casablanca SE Tunis SE Source: Zawya and EY analysis Saudi Arabia stock exchanges with higher PE ratios. The average PE and DY for MENA indices PE DY % 5% 1% 15% 2% Abu Dhabi SE Bahrain SE Dubai FM Kuwait SE Qatar SE Tunis SE Source: Zawya Egypt SE Saudi SE Muscat SM Casablanca SE Possibility of increase in IPO-focused funds funds in Saudi Arabia in 213, with the net asset value (NAV) or non-ipo fund. for subscription. The Saudi Kuwait Finance House (SKFH) also in May 214. Challenges of the MENA IPO market MENA IPO Eye Q

6 to liquid investor base, and also owing to less onerous regulatory restrictions in foreign exchanges. Other challenges faced by corporates considering public of readiness on the part of the issuer to deal with the IPO process Key trends highlights 6 MENA IPO Eye Q2 214

7 Broader outlook IPO activity on the growth path MENA IPO activity is expected to strengthen during 214, with status at the end of May 214 will go a long way toward changing institutional investors could eventually change the face of the stock Regulatory initiatives to improve the market the country s stock exchange to raise their foreign ownership and expand their shareholder base. Under the new rules for listing Saudi Arabian-based family businesses planning for public issue take their businesses to the next level. business units currently planning for an IPO include Saudi Binladin s Firms rushing to issue IPOs the MENA region have announced plans to go public during 214. by way of an IPO or selling ownership to a strategic partner the cargo unit of Saudi Arabian Airlines (Saudia), Hassad Food Broader outlook highlights MENA IPO Eye Q

8 Companies planning or in the process of public issue in 214 (publically announced) Country Issuer Sector Bahrain Istikhlaf Bank Financial services Transport Zain Bahrain Egypt Etisalat Misr Services Rooya Group Kuwait Financial services Lebanon Patchi Retail Libya Morocco Total-Maroc Oil and gas Power and utilities Financial services Transport Qatar Financial services Financial services Agriculture Saudi Arabia Power and utilities Health care Health care Financial services Financial services Saudi Arabian Airlines (Saudia) cargo Unit* Transport Oil and gas Saudi Stock Exchange (Tadawul) Financial services Financial services Sudan Food and beverages UAE Able Logistics Group Transport AlWaseet International Media Aster DM Healthcare Health care Power and utilities Nakheel* Shelf Drilling Oil and gas Source: Zawya IPO Monitor Note: *State-owned entities Mayur Pau MENA IPO Leader valuations and solid after- The regional IPO expected to list in the region on NASDAQ Dubai with Sectors a capital that raise are likely since to show strong IPO appetite are those products, and healthcare. 8 MENA IPO Eye Q2 214

9 Key events to look out for Event Date Theme MENA IPO Retreat, Dubai (by invitation only) and strategies in preparation for an IPO panel of industry experts and professionals Contacts Mayur Pau MENA IPO Leader Darrell Traynor Executive Director Transaction Advisory Services Shahzad Shaikh Manager Transaction Advisory Services MENA IPO Eye Q

10 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust role in building a better working world for our people, for our clients outstanding leaders who deliver exceptional services to our clients All Rights Reserved. ED None to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com/mena