Qatar has reported the Middle East and North Africa's (Mena) second-largest initial public offering (IPO) during the third quarter (Q3) of 2023 with Meeza, an established end-to-end managed IT services and solutions provider, raising as much as $193mn, according to Ernst and Young (EY), a global consultant.
Meeza, which became Qatar's first IPO through book building, was listed on the Qatar Stock Exchange (QSE) in August 2023.
As many as 324.49mn shares were offered for subscription, representing 50% of the total capital. Some 121.39mn shares were offered for qualified investors who participated in the book-building process, representing 18.71% of the capital, and 203.1mn shares for Qatari individual and corporate investors, representing 31.29% of the company's capital.
The Mena markets otherwise saw six IPOs during Q3-2023, raising $523mn. This however represented a 14% decrease in the number of maiden offers and a 66% drop in proceeds compared with the previous year period.
EY said the first-day returns were "positive", with all six listings registering a gain. Meeza shares were seen vaulting 6% on debut, although it touched an intra-day high of 10%.
"Investor confidence in the region continues, with 21 out of the 29 year-to-date (YTD) IPOs ending Q3-2023 with a gain in share price since listing," said Brad Watson, EY Mena Strategy and Transactions Leader.
At the end of Q3-2023, there were a total of 29 IPOs YTD in Mena with total proceeds of $5.8bn, marking a 6% reduction in volume and a 61% decline in funds raised year on year. All YTD listing activity took place in the Gulf Cooperation Council region.
"Despite the lower levels of proceeds from Mena listings, the IPO pipeline for the fourth quarter (Q4) of 2023 and into 2024 remains promising, particularly driven by Saudi Arabia, where 27 companies have announced their intention to list on the Tadawul," EY said.
The IPOs remain driven by the dominant economies of Saudi Arabia and the UAE, which are pursuing their strategic agenda of increasing capital market activity on the local exchanges and stepping up efforts to attract foreign investment, according to Watson.
“Despite a slow Q3 2023, we are still optimistic that the remainder of 2023 and 2024 will show a healthy number of IPOs on the Mena markets based on current pipelines. The Q4-2023 is already off to a strong start with three IPOs successfully completed in Saudi Arabia, and we are expecting additional IPOs toward the end of 2023 in the UAE," said Gregory Hughes, EY Mena IPO and Transaction Diligence Leader.
EY said sustainability initiatives continue to gain prominence in the region, with companies increasingly realising the importance of environmental, social, and corporate governance (ESG) to investors.
With the UAE gearing up to host the 28th UN Climate Change Conference (COP28) this year, Mena stock exchanges are doing their part in supporting ESG reporting and adoption.
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