MENA IPO Eye
Q2 2016
MENA IPO h i g h l i g h t s
Q2 2016
Volume
MENA
GCC
S ix d e a ls
T w o d e a ls
U S $ 0 .4 b
U S $ 0 .3 b
(200% increase on Q1 2016)
Value
(34% decrease on Q1 2016)
(100% increase on Q1 2016)
(42% decrease on Q1 2016)
M E N A IP O a c t iv it y
2,500
12
10
2,000
10
8
6
1,500
6
1,000
2
500
0
$255.7
$2,120.5
na
na
Q1 15
Q2 15
Q3 15
Capital raised (US$m)
4
2
2
$118.7
$598.0
$397.2
Q4 15
Q1 16
Q2 16
2
0
Volume (number of IPOs)
Capital raised (US$m)
(Q1 2015 — Q2 2016**)
Volume
** As at 27 June 2016
Note: The value of the capital raised through IPOs in Q1 2016 has been revised from US$615m to US$598m due to the currency deviations between the Egyptian Pound and US Dollar in relation to the IPO of
Arabian Food Industries Company, which was updated by Capital IQ following the cut off for the Q1 2016 publication.
K e y tre n d s
• The Middle East and North Africa (MENA) region witnessed six IPOs which collectively raised US$397.2m.
Saudi Arabia and Egypt continue to lead IPO activity in MENA.
IPO
MENA
• Oil prices have continued to recover from the bottom of January 2016, breaching the US$50 per barrel in the quarter,
due to supply side interruptions, a decline in US crude production and increase in global demand. Oil prices continue to
fluctuate post Q2 2016.
• The result of the UK referendum to exit the European Union resulted in volatility in the capital markets which impacted
MENA stock exchanges, however the global and MENA capital markets appear to have recovered to pre vote levels by
the beginning of Q3 2016.
• The UAE has circulated new draft IPO regulations for feedback from stakeholders. These regulations set requirements
increasingly in line with international exchanges.
• The CMA (Saudi Arabia) has announced a number of major changes as Saudi Arabia works toward inclusion on the
MSCI Emerging Market Index. These changes include relaxing the requirements for foreign institutional investors,
introducing new trading options, relaxing reporting deadlines and implementing a new settlement process
(T+0 to T+2).
E x c h a n g e s b y c a p it a l r a is e d
S aud i S E
U S $ 2 7 3 .6 m
(Two deals)
T o p t h r e e is s u e r s
Eg yp t S E
Al g e ri a S E
U S $ 4 4 .1 m
U S $ 5 8 .1 m
(Two deals)
(One deal)
A m o u n t
(Return (%)*)
T un i s S E
U S $ 2 1 .3 m
(One deal)
S e c t o r s b y c a p it a l r a is e d
Al-Yamamah Steel
Industries Company
(Saudi SE)
U S $ 1 4 6 .3 m
Industrial
manufacturing
U S $ 1 5 0 .0 m
L’AZURDE Company
for Jewelry
(Saudi SE)
U S $ 1 2 7 .3 m
Consumer
goods
U S $ 1 2 7 .2 m
Health care
U S $ 1 1 9 .7 m
Biopharm SPA
(Algeria SE)
Source: Thomson Eikon, CapitalIQ and Press
2
| MENA IPO summary
(–12%)
(–11%)
U S $ 5 8 .1 m
(7%)
*Return is share price change from first trade date until 27 June 2016
(Two deals)
(One deal)
(Three deals)
Note: SE — stock exchange
S u m m a r y o f IP O s (2 0 1 5 – 1 6 )
R e g io n a l s t o c k m a r k e t
p e rfo rm a n c e
Market return (% change)
since Jan 2016 to Jun 2016
Regional stock market performance — YTD 2016 (%)
20.00%
Q uart e r
Issue r
Q2 2016 — 13 Jun
L’AZURDE Company
for Jewelry
Q2 2016 — 30 May Cleopatra Hospital
5.00%
S iz e
( U S $ m)
S e c t o r
Ex c h an g e
127.3 Consumer Goods
40.4 Health Care
Saudi SE
Egypt SE
Q2 2016 — 3 May
Al-Yamamah Steel
Industries Company
Q2 2016 — 23 Apr
Unité de fabrication
de médicaments
(Unimed)
21.3 Health Care
Tunis SE
Q2 2016 — 7 Apr
Biopharm SPA
58.1 Health Care
Algeria SE
Q2 2016 — 5 Apr
MB For Engineering
and Contracting
Q1 2016 — 17 Mar
Arabian Food
Industries Company
(Domty)
126.9 Food and Beverages
Egypt SE
Q1 2016 — 9 Mar
Middle East
Healthcare
Company
471.1 Health Care
Saudi SE
Q4 2015 — 23 Dec
Al-Andalus Real
Estate Company
100.8 Real Estate
Saudi SE
Q4 2015 — 2 Dec
AFMA SA
Q2 2015 — 25 Jun
Emaar Misr
298.8 Real Estate
Source: Capital IQ
Q2 2015 — 23 Jun
Zain Iraq
0.004 Telecommunications
Iraq
O il p r ic e m o v e m e n t
Q2 2015 — 9 Jun
Saudi Ground
Services Company
751.9 Transport
Saudi SE
Q2 2015 — 8 Jun
Phoenix Power
Company SAOG
146.2 Power and Utilities
Muscat SM
–10.00%
–25.00%
4 Jan 16
27 Feb 16
21 Apr 16
Abu Dhabi SE (AD)
Dubai FM (DFM)
Saudi SE (SASE)
FTSE 350
14 Jun 16
Bahrain SE (BSE)
Qatar SE (QSE)
Egypt SE (EGX)
Source: CapitalIQ
Ex c h an g e
Y T D
Mark e t C ap
(U S $ b )
SASE
–5%
401.2
QSE
–2%
119.4
AD
5%
119.4
DFM
7%
79.8
BSE
–8%
49.1
EGX
–1%
21.9
FTSE 350
–4%
3433.2
(last one year)
60
50
40
30
20
10
Opec price
Jun 2016
May 2016
Apr 2016
Mar 2016
Feb 2016
Jan 2016
Dec 2015
Nov 2015
Oct 2015
Sep 2015
Aug 2015
Jul 2015
0
Jun 2015
Oil prices (US$ per barrel)
70
Europe Brent crude
• Volatility in the global capital markets, driven by events
such as the vote by the UK to exit the European Union
and fluctuating oil prices, may result in future volatility
on the MENA capital markets and the potential deferral
of IPOs in the MENA region.
3.7 Industrial
Manufacturing
17.9 Financial Services
Saudi SE
Egypt SE
Casablanca
SE
Egypt SE
Q2 2015 — 20 May Universal
Automobile
Distributors Holding
42.0 Transport
Tunis SE
Q2 2015 — 15 May Total-Maroc
73.9 Oil and Gas
Casablanca
SE
Q2 2015 — 11 May Integrated
Diagnostics
Holdings PLC
290.2 Health Care
London SE
Q2 2015 — 28 Apr
Saudi Company for
Hardware
134.4 Industrial
Manufacturing
Saudi SE
Q2 2015 — 14 Apr
Middle East Paper
Company
119.9 Industrial
Manufacturing
Saudi SE
Q2 2015 — 1 Apr
Edita Food
Industries
263.0 Food and Beverages
Egypt SE,
London SE
Source: OPEC and Energy Information Association (EIA)
B r o a d e r o u t lo o k
146.3 Industrial
Manufacturing
Source: Capital IQ and Thompson Eikon
S e le c t IP O s in p ip e lin e
Issue r
C o un t ry
Arab African International Bank
Egypt
Amman Stock Exchange
Jordan
Saudi Aramco
KSA
Mobinil for Telecommunications SAE
Egypt
• Regulators in the MENA markets continue to implement
new regulation to strengthen the capital markets and
attract investment.
Arabian Centres Co Ltd
KSA
Emirates District Cooling LLC
UAE
Saudi Stock Exchange Tadawul
KSA
• Saudi Arabia and Qatar have announced plans to open
a new exchange for small and medium-sized companies
in late 2016 and 2017.
Arabtec Egypt for Construction
Egypt
Abraj Misr
Egypt
• Given recent trends, Saudi Arabia and Egypt are the
key MENA markets most likely to see any IPO activity
following the traditionally quiet summer period.
Source: Thomson Eikon, CapitalIQ and Press
Rayyan Mineral
Source: Capital IQ and Thompson Eikon
Qatar
Note: SE — stock exchange, SM — stock market
MENA IPO summary |
3
C o n ta c ts
H o w E Y c a n h e lp
Mayur Pau
Partner — EY MENA Growth Markets and
Financial Services IPO Leader
[email protected]
+ 971 4312 9446
G re g o ry H ug h e s
Partner — EY MENA Transaction
Advisory Services — IPO Leader
[email protected]
+ 971 5650 35085
D arre l l T rayn o r
Executive Director — EY MENA Transaction
Advisory Services
[email protected]
+ 971 4312 9446
S h ah z ad S h ai k h
Manager — EY MENA Transaction
Advisory Services
[email protected]
+ 971 4701 0858
K e y e v e n ts
Name o f t h e e v e n t
D at e
T h e me
Middle Eastern M&A and
Private Equity Forum 2016,
Saudi Arabia
TBA
This flagship event will give you
the opportunity to hear from
expert speakers who will discuss
and debate M&A activity in
the Middle East and the wider
emerging markets. Sessions will
also explore future investment
opportunities for dealmakers
over the next year.
E Y
IPO planning
Post IPO
IPO execution
7
• For any company considering an IPO on a MENA or
International stock exchange, it is critical to map out the
IPO Value Journey.
• As a first step to effective IPO planning we recommend
undertaking an IPO readiness diagnostic to identify the key
gaps across several areas of the business when compared to
best practice and stock exchange requirements.
• A key output of the IPO readiness diagnostic is a detailed
roadmap of activities to address identified gaps, actioned
with the assistance by EY professionals and other specialist
advisors.
• Effective IPO planning and execution will increase your
chances of a successful IPO transaction, help improve your
business and save time and costs during the IPO journey.
EY IPO se rv i c e s
1
IP O r e a d in e s s d ia g n o s t ic
Including various followup services to help address the
IPO readiness gaps identified.
2
IP O e x e c u t io n s e r v ic e s
Dependent on listing destination, including: Financial
Due Diligence, Working Capital Report, Feasibility
Studies, Valuation Services, Financial Positions and
Prospects, MD&A section of Prospectus drafting,
Comfort Letters and Project Management services.
EY has a dedicated MENA IPO team which has experience in
successfully executing IPO services across key exchanges in
MENA and Internationally.
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ED None
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