The first quarter of 2017 saw 10 new initial public offerings (IPOs) registered on the stock markets among the six members of the Gulf Cooperation Council (GCC), a five-year record high and propelled by Saudi Arabian small and medium-sized businesses, according to a press release issued by consultancy firm PwC.
IPO news in the region is important, as Saudi Arabia, the Arab world’s biggest economy, announced plans to list its state-owned oil company, Aramco, the world’s most valued company, as part of a wider economic plan adopted by the kingdom to diversify its economic resources away from hydrocarbons, especially since the oil price plummeted to record lows in 2014.
According to a PwC statement sent to Zawya on Tuesday, the GCC, which includes Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain, had 10 IPOs in the first three months of this year, up from only one in the first quarter of 2016. Seven of the ten newly listed companies were Saudi and were registered on Saudi Arabia’s NOMU, the first parallel market in the GCC, which is targeting small and medium-sized enterprises (SMEs).
PwC said the news will encourage more stock market participation from SMEs, which constitute the majority of companies in the region, accounting for around 95 percent of the total firms in the UAE.
In a move to support SMEs, the Abu Dhabi Securities and Commodities Authority, (SCA), two years ago developed new rules to enable SMEs to trade at the secondary market launched by the Abu Dhabi Securities Exchange, ADX and the Dubai Financial market, DFM.