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29 March 2024

3 IPOs raised Dh5.87bn in Mena in Q1

Asiacell Communications raised $1.3 billion through IPO in Q1 2013.

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By Staff

Mena capital markets recorded a 20-fold increase in capital raised in the first quarter of 2012, Ernst & Young’s said in its quarterly update.

Three companies raised $1.6 billion (Dh5.87 billion) through IPOs in Q1 2013 as compared to four firms raising $82.8 million in the same period last year.

The three regional IPOs in Q1 2013 represented a 374.3 per cent increase from the $339.8 million raised in the previous quarter, Q4 3012.

Phil Gandier, Mena Head of Transaction Advisory Services, Ernst & Young, said: “Q1 2013 posted the strongest results for the first quarter of the year since 2008. However, the majority of the value is attributed to a large ticket telecommunications IPO in Iraq. This sector is traditionally associated with large value transactions and the high Q1 performance will be sustainable if we start to see similar large value transactions on a regular basis which would bolster the regions capital markets.”

In Q1 2013, two IPOs were launched in Saudi Arabia while one was reported in Iraq. The largest issuance was in Iraq, with Asiacell Communications raising $1.3bn, followed by Northern Region Cement Company in Saudi Arabia that raised $240m and National Medical Care Company in Saudi Arabia that raised $97.2m.

“Over 40 per cent of investors in the Middle East and Africa stated a preference to invest overseas, as evidenced in Ernst & Young’s recent institutional investor study. Therefore, the challenge remains whereby more domestic deal activity would be a key driver for stronger IPO activity and growth in the Mena region,” said Phil.