Things had been looking tough for entrepreneurs in the MENA region up till mid-2024, with multiple deals being postponed. But as per the latest reports, Saudi Arabia and the UAE will be among the top MENA nations launching high-valued IPOs in the foreseeable future.
In Saudi Arabia, more than 25 companies have already entered the IPO pipeline for this year. In UAE the number is strong as well with leading names such as Parkin, Tabby, Lulu Group, etc. leading the IPO race.
How is MENA able to hold up?
There are several factors that are ensuring businesses in the region are able to keep their heads up. In UAE, family-owned businesses seem to be doing really well despite all the market setbacks. Al Ansari Financial Services, one of Dubai’s largest family-owned remittance and foreign currency exchange houses, raised a whopping $210 million in last year’s IPO. So, it is expected that Lulu Group will follow suit this year.
Fintech is another sector that has been performing well in the MENA region, and startups in the sector are poised to enter the IPO race as well. On the other hand, the global investment banks are also broadening their advisory and providing underwriting services specific to Middle Eastern countries.
Many IPOs had been postponed once the 2022 IPO boom in Saudi and UAE ended. So, it is expected that some of those deals will be taking place now. While global economic stability is still very much a factor to consider, the MENA market is now ready to get back into investment season.
Further outlook for 2024
Analysts largely state that the overall economic development of MENA countries will lead to increased IPO activity. While high-profile IPOs are always expected to do well, investors will most likely seek out a balance between growth and profitability.
The governments also have a strong role to play in the process. From ensuring budget deficits from lower oil prices are covered, to finding the funding for multiple development projects; there are many steps to take to ensure the cost of borrowing does not remain high.
One of the key steps taken by the Saudi government include privatization of state-backed enterprises. Apart from strengthening the private sector, this has also led to diversification in the market and helped create sovereign liquidity.
While the shift in the global market movements has affected all countries, MENA seems to be the region that will bounce back first when it comes to securing investments.
