High Oil Prices Ignite The Middle Eastern IPO Market

Initial public offerings in the Middle East have flourished this year thanks to higher prices that have seen increased investor interest in the region.

This has resulted in IPO proceeds from the Middle East so far this year accounting for close to 50 percent of total IPO proceeds across the wider Middle East, Africa, and Europe region, Bloomberg has reported.

Inflation pressured IPO markets in other parts of the region, notably in Europe, but in the Middle East, the situation is quite the opposite, with stock markets surging along with oil prices since 2021, attracting more and more investor interest.

“GCC investors consider shares of well-known companies, especially from the public sector, as an excellent way to diversify their savings from real estate, hugely subject to swings in demand and supply, and bank deposits that yield low returns,” Vijay Valecha, chief investment officer at Century Financial, told Bloomberg. “So in the near term, buoyancy in local markets is likely to be sustained.”

So far this year, listings in the Middle East have raised a total $16.6 billion and are on track to record their best year since 2019, an earlier Bloomberg report noted. One of the companies taking advantage of the favorable conditions is none other than the UAE’s Adnoc.

According to reports, Adnoc plans to list its shipping unit, possibly as early as the first half of 2023. Adnoc Logistics operates more than 200 tankers and container ships, including LNG carriers. Its listing is coming at a time when demand for tankers is surging because of the looming EU sanctions on Russian oil and fuels.

Another of the newly public companies in the Gulf was Saudi oilfield services provider Arabian Drilling Co., which made its debut on the stock market this week, raising $710 million, with $43 billion in orders in a heavily oversubscribed issue.

By Charles Kennedy for Oilprice.com

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