Page 194 - AAE PR REPORT - June 2024

5/30/24, 8:43 AM MENA’s IPO pipeline to remain ‘promising’ in 2024, despite regional challenges
“The growing trend of both public and private enterprises looking to list publicly has
spurred global investment banks to broaden their advisory and underwriting services in

the emirate. These emerging investment prospects are consequently drawing a wave of

private capital, accompanied by wealth and asset managers to oversee these
investments,” said Najjar.

Looking ahead, Najjar said “signs of a global market rebound [were] on the horizon.”

“With anticipated interest rate cuts later in the year, we expect a revival of postponed IPOs
and debt issuances. We also anticipate more public listings from the private sector, which

will increase sector representation in equity markets and contribute to deeper capital
markets,” he added.

Market experts say IPO activity in 2024 will depend largely on global economic stability

and a positive track record for recent post-IPO performances. Improving economic
conditions in MENA would boost optimism that the market will revive in 2024, while other

variables such as interest rates and market volatility will have a greater influence on
market sentiment later in the year.

Issuers will closely monitor the performance of high-profile IPOs launched during the last

quarter of 2023 and early 2024 as an indicator of investor appetite for new offerings. The
convergence between issuer and investor valuations during this period is likely to improve

post-IPO performance and pave the way for more IPOs coming to market in 2024.

Investors will continue to seek reasonably priced IPOs from companies that offer a
balance between profitability and growth.

Meanwhile, the debt issuance market in the MENA region will follow the global trend,

experiencing subdued growth in the coming year as interest rates remain high, with high
costs of refinancing.

“Governments will continue to drive issuance in the region to cover expected budget

deficits from lower oil prices, to refinance maturing debt, and to fund major development
projects. Meanwhile, corporate debt issuance is expected to slow as the cost of borrowing

remains high,” the report adds.

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