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Baladna IPO among top 3 GCC IPOs in 2019: PwC

Satyendra Pathak
The initial public offering (IPO) of Baladna Food Industries, Qatar’s largest producer of fresh dairy and beverages, was among the top three IPOs in terms of proceeds in 2019, PwC has said in its latest report.
According to PwC GCC Capital Markets Watch for the fourth quarter of 2019, Baladna IPO that raised $395.51 million was the second biggest in 2019 after Aramco’s $25.6 billion listing on Tadawul.
The Baladna IPO was the second major offering in Qatar since the 2017 embargo, coming after an offering last year for Qatar Aluminium Manufacturing Company.
In contrast to the subdued IPO markets in the first three quarters of the year when only four IPOs took place, the report said, GCC countries witnessed as many IPOs in the fourth quarter alone representing 96 percent of the annual GCC IPO proceeds for 2019.
“GCC equity capital markets attracted significant global attention in the fourth quarter. Whilst 2019 experienced record-breaking IPO proceeds, the number of listings significantly reduced to 8 IPOs, compared to 17 in 2018,” the report said.
“Macro-economic and geopolitical uncertainties remain and are expected to continue in the near term. Inevitably these will have an impact on GCC market activity. Nevertheless, companies which are well prepared and have a strong investment case will continue to be able to benefit from the capital markets,” it said.
Notwithstanding the significant proceeds from the IPO of Saudi Aramco in EMEA and multiple listings on Shanghai’s Star Market in Asia-Pacific, the report said that 2019 IPO volumes and proceeds were both lower than the previous two years
“The global equity market was quieter in 2019. Impacted by the geopolitical and economic uncertainty, investors are focusing more on IPO pricing and in particular for growth companies, a clear pathway to profitability. This could be readily observed in the US, with Uber, Lyft and Pinterest all completing their IPOs, but with pricing challenges, and with the high-profile collapse of the Wework IPO,” the report said.
Cross-border activity remain an important factor for IPO levels with observable trends continuing for technology companies to look to the New York markets and companies from Africa, the Middle East and the CEE looking to London.
The fourth quarter of 2019 was nonetheless a strong quarter faring better than the equivalent quarter in 2018 in terms of both proceeds and volume. Globally, 338 IPOs raised $71 billion in the fourth quarter of 2019 compared to 303 IPOs with proceeds of $57.6 billion in the fourth quarter of the previous year.