DUBAI - Plans for three Gulf IPOs announced in the past week don't change the picture of a slow pickup in company flotations in the region."The broader market needs to stabilize first and valuations need to become attractive for owners to sell," said Jithesh Gopi, head of research at SICO investment bank in Bahrain, who sees a chance of more IPO activity in the second half of next year, rather than earlier on.
Gulf IPO activity ground to a halt as a result of the financial crisis and only four Middle East companies listed in the third quarter of 2009, raising $872 million, Ernst & Young said in a report this week.
By contrast, 14 companies listed in the same period a year ago, raising $3.74 billion.
"Companies are still wary of the strength of the recovery in the region," said Phil Gandier, managing partner, transaction advisory services, at Ernst & Young Middle East.
"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 the regional stock markets," he said.
Around 152 IPOs for the region are either announced, delayed or rumored, Gandier said.
UAE's Daman Investments said on Tuesday it wants to float 30 percent of its company on the Abu Dhabi or Dubai exchange by the end of 2012.
Proceeds will be used to finance the company's brokerage activities, to fund its activities and boost its warchest for potential acquisitions, Chief Executive Shebab Gargash told Reuters.
Daman said it had "taken a hard look at the markets and are confident our long term positive view is justified."
In Saudi Arabia, automotive specialist Almutlak Trade and Industries plans to sell 30 percent of its shares early next year, while energy services firm TAQA said it would float stock before mid-2010.
Emirates Capital, a regional corporate finance firm, is considering an IPO in two to three years, likely on the Nasdaq Dubai, its chief financial officer recently told Reuters.
But despite the early signs of an IPO revival, Daman's Gargash doesn't expect a flurry of IPO activity in the short term. "I don't see it," he said. "But at least the climate of no IPOs is no longer with us."