Middle Eastern companies eyeing public listings in the upcoming quarter remain undeterred, unlike their counterparts in Europe and the US. Bankers involved in these transactions report that the region’s firms are relatively shielded from the impact of US tariffs. Many of these businesses are closely linked to the rapidly growing local economies, suggesting a robust IPO landscape ahead.
Continued Confidence in IPOs
EFG Hermes, a leading player in the Middle East IPO market, anticipates launching six to seven new deals in 2025, mainly in Saudi Arabia, with a potential deal also in Kuwait. According to a senior banker, the pipeline for these offerings remains strong. Likewise, JPMorgan Chase & Co. reports stability in its regional IPO plans, with no significant disruptions affecting preliminary talks for potential listings in 2026 and 2027.
Mostafa Gad, the global head of investment banking at EFG Hermes, emphasized, "We’re still on track," noting that none of their planned deals have faced delays or cancellations. The firm is actively preparing for new share sales, showcasing resilience amid global market fluctuations.
Navigating Market Volatility
Despite the optimism, the backdrop of ongoing market volatility raises concerns. Global assets have experienced notable swings, particularly following US President Donald Trump‘s recent implementation and subsequent pause of sweeping tariffs. The oil-exporting Gulf region may face economic challenges as crude prices dipped below $65 per barrel, spurred by an unexpected OPEC production increase and tariff-related fears of a global economic slowdown.
Gad cautioned, "If we see bigger pressure below the $60 mark, then you start seeing some alarms." He noted that government responses could vary, with options ranging from cautious spending cuts to accepting a temporary increase in deficits.
Upcoming IPOs in the UAE
In the UAE, Etihad Airways PJSC has been preparing for an IPO since last year, while Dubai Holding LLC, overseen by the emirate’s ruler, has considered listing a residential real estate portfolio. However, decisions on the timing of these offerings are still pending as both companies closely monitor market conditions.
Gokul Mani, head of equity capital markets at JPMorgan for Central Eastern Europe, the Middle East, and Africa, remarked that while some transactions may experience slight delays due to global disruptions, the overall pipeline remains unaffected. He anticipates that only higher-quality companies will succeed in their listings, reflecting a more discerning investor landscape.
Recent Approvals in Saudi Arabia
Several Saudi companies recently received regulatory approval for their IPO plans, including Flynas, a budget airline, Sports Club Co., a gym chain, and Specialized Medical Co., among others. Tech firms like Ejada Systems and packaging companies such as United Carton Industries Co. are also set to make their market debut.
Nevertheless, some investors, like Christian Ghandour, senior portfolio manager at Al Dhabi Capital, believe it may be too early to focus on new listings. He noted, "Volatility is still very high on all the financial parameters that affect any valuation," indicating a cautious approach as they navigate the current economic landscape.
In conclusion, the Middle Eastern IPO market appears resilient, with several companies poised to enter the public domain despite global uncertainties. Investors will need to remain vigilant as they seek opportunities in this evolving landscape.
