What's Down: GCC IPO activity declined 79 per cent in the fourth quarter after the Arab Spring and Europe's debt crisis discouraged companies from going public.
Big decline in money from IPOs in region
The amount of money raised from initial public offerings in the Gulf fell by almost 79 per cent in last year's fourth quarter from the same period in 2010.
Regional capital markets raised US$212 million in the first sale of stock to the public, compared with $1.02 billion in the same period a year earlier.
Only three companies - Saudi Arabia's United Electronic Company, Saudi Enaya Cooperative Insurance and Oman's SMN Power Holding - went public.
Gulf stock markets, with the exception of Qatar, ended last year down from the previous year, after the Arab Spring and the euro-zone debt crisis dampened investor sentiment.
Equities continued their decline throughout the year, and trading activity was subdued as institutional investors remained on the sidelines. The Bahrain Stock Exchange was the worst performer, ending the year down by 20 per cent, followed by Dubai, which declined 17 per cent.
"Investor-risk caution, coupled with issuer reluctance to sell at perceived lower valuations, contributed to a slow and stifled year in the equity markets," said Steve Drake, the head of capital markets in the Middle East at PricewaterhouseCoopers. Many companies instead opted for alternative funding sources such as sukuk, Mr Drake said.
In the UAE, investment banks took aggressive cost-cutting measures, closing brokerage and research officesas clients pulled back from adverse markets.
Shuaa Capital in Dubai on Monday reported a net loss of $293.8m for last year, 31 per cent more than in 2010, and said it would cut 55 more jobs.
The National Investor in Abu Dhabi is going through a second wave of layoffs this month, after cutting more than half of its staff last year, Reuters reported last week. The company has about 55 employees.
Foreign investment banks have not been immune.
Germany's Deutsche Bank moved its head of equity capital markets back to London from Dubai. Nomura, based in Tokyo, closed its Dubai equity research unit, and the UK's HSBC has shuttered its retail brokerages unit in the Emirates.