The number of initial public offerings (IPOs) in the Middle East fell more than 70 percent to four during the third quarter, as companies were not convinced of a sustained economic recovery, Ernst & Young said on Monday.Three IPOs in Saudi Arabia and one in Syria raised about $872 million in the third quarter, compared with 14 IPOs raising $3.74 billion during the third quarter of 2008, the study said.
“Whilst the market may not change significantly during the remainder of this year, once there is evidence of a sustained recovery in the region, there is likely to be an increase of fund-raising on regional stock markets and the 152 announced, delayed or rumoured IPOs would be anxious to list,” Phil Gandier managing partner of Ernst & Young Middle East’s transaction advisory services division, said in a statement.
The Middle East IPO market beat Europe, which saw $189.2 million worth of deals in the quarter, or 0.5 percent of the world capital raised.
Saudi Arabia’s National Petrochemical Co was the largest Middle East IPO in the third quarter, raising $640.8 million followed by Saudi Steel Pipe Co, which raised $106.8 million.
Ernst & Young said nearly two out of three IPOs in the third quarter were by firms in China, which led the market.
The United States came in second with $3.2 billion worth of IPOs, or 8.4 percent of global capital raised. Indian firms were third with $2.6 billion, or 7.2 percent of global capital raised.
Ernst & Young said it expects another strong quarter for the IPO market in Asia, “the absence of a rapid rebound in Europe” and a “cautious but substantive” improvement in IPO sentiment in the United States.