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Abu Dhabi, UAETuesday 19 June 2018

Mena IPO numbers in first half of year best since 2007

Deal value though falls 21 per cent to $788m

Saudi Arabia's Nomu market accounted for nine IPOs in the first hal of this syear worth $200.5m . Reuters
Saudi Arabia's Nomu market accounted for nine IPOs in the first hal of this syear worth $200.5m . Reuters

The number of Mena initial public offerings in the first half of this year was the highest since the first half of 2007, but the value of deals fell, according to a new report.

Sixteen IPOs took place in the first half of this year, a 100 per cent increase compared with a year-earlier period, advisory EY said.

However, the value of deals fell by 21 percent to US$788 million during the period.

“Increasing stability in oil prices and confidence in the global economy and markets are likely to drive an increased IPO activity in 2017 and 2018 across Mena, with a strong backlog of companies potentially preparing to come to market,” said Gregory Hughes, EY Mena IPO leader. “The key driver for the Mena IPO market will likely be the privatisation of leading government-owned assets across a number of sectors.”

Oil prices hit $59.02 a barrel on Monday , the highest level since July 2015 on re-balancing optimism.

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The UAE’s state-owned Abu Dhabi National Oil Company plans to float some of its units, including the distribution business, as part of an overhaul of its operations.

Out of the 16 IPOs, nine worth $200.5m were from companies listed on Nomu, the Saudi market for small and medium sized companies, which is parallel to kingdom's stock benchmark Tadawul All Share Index.

The largest Mena IPO was the $243m listing of Dubai-based oil and gas production services firm ADES International Holding on the London stock exchange.

The greenfield IPO of Orient UNB Takaful in the second quarter of this year on the Dubai Financial Market (DFM), was the first floatation on the exchange since the listing of DXB Entertainments in 2014.

In the Arabian Gulf, 13 IPOs took place in the first half of this year, a 33 per cent uptick in the number of deals compared with a year-earlier period, but deal value fell by 6 per cent to $700m.