Qatar witnessed the highest valued IPO (initial public offering) in 2018 in the Middle East and North Africa (Mena) region with the listing of Qatar Aluminum Manufacturing Company (Qamco) on the Qatar Stock Exchange, raising $745.6mn during the fourth quarter, according to Ernst and Young (EY).
FTSE Russell announced the entry of Qamco to the FTSE Index within the first week of trading, owing to the positive response generated by the IPO (which was 2.5 times oversubscribed).
The QSE has performed well in 2018 with prospects of inflows from investors tracking emerging-market indexes after the relaxation on foreign ownership curbs.
According to the Qatar Financial Center Authority, overseas institutional investors were net buyers of about $2.3bn on the QSE during 2018, which was more than triple the foreign flows into the neighbouring countries.
"The successful subscription of Qamco reflects the strength of Qatar’s economy, and the government’s mandate towards supporting capital markets and privatisation as it pursues diversification of the economy," Phil Gandier, Mena Transactions Leader, EY, said.
The Mena region saw 26 IPOs collectively raise $2.95bn in 2018. Compared to the 2017 level, IPO volume declined 23.5% and value by 24.6%.
In the North African markets, Egypt, Morocco, Algeria, and Tunisia recorded eight deals for a total value of $381.6mn in 2018.
Gregory Hughes, Mena IPO Leader, EY, said while the capital markets in the region are moving at a “cautious” pace, they saw a healthy diversification in sectors when compared to the dominance of REITs (real estate investment trusts) seen in the previous quarter of the year.
"Despite current macroeconomic conditions, the Mena region witnessed 26 IPOs in the year, which is extremely encouraging," he said.
Globally, IPO activity continued to slow down during Q4 2018, with 326 IPOs raising $53.7bn, marking a decrease of 34% and 10% year-on-year respectively.
This can be attributed to current market volatility, oil prices and ongoing global trade issues which have delayed processes and left a lot of uncertainty regarding the execution of IPOs in the current environment.