MENA IPOs see year-end surge in 2017

Source: EY. MENA IPO activity from Q116 to Q417.

-  MENA IPO activity witnessed a 60% surge with eight deals in Q417, raising the highest value since 2014

-  UAE leads the MENA IPO value with US$2.2 billion in Q417

-  More regional energy companies to go public in 2018 and beyond

In the fourth quarter of 2017, MENA IPO activity witnessed eight deals, representing a 60% surge in volume over the same period in 2016. The MENA IPO value, or capital raised, amounted to US$2.95 billion in Q417, over 10 times the capital raised last year and the highest since 2014, said EY.

The UAE led the MENA IPO market in value, having raised a cumulative of US$2.2 billion in capital, primarily contributed by the Emaar Development IPO (US$1.3 billion), which has been the biggest IPO in the region since 2014.

The UAE also saw another successful issuance in the form of the ADNOC IPO which raised a capital amounting to US$850.9 million.

In Oman, the Muscat Securities Market recorded the highest number of listings with three IPO deals during Q417, raising a combined capital of US$8.9 million.

The MENA IPO activity is expected to gain momentum in 2018 bolstered by economic reforms and privatisation drive of countries such as KSA. This, coupled with improved oil prices, favourable government initiatives and strong investor appetite, is likely to spur more listings in the MENA, especially from regional government-entities.

Gregory Hughes, MENA IPO Leader, EY says: “The IPO activity is poised for further growth in 2018, especially with government and quasi-government owned assets preparing to go public in Kuwait, Egypt, KSA and the UAE. The IPO activity in the region is likely to see a mix of local and international floatings. In addition, family-owned, owner managed, and private equity-backed businesses are also signalling their intention to go to the market during 2018; this again could include a combination of local and international offerings of different sizes.”

KSA remains a bright spot in the region. The IPO market in the country looks buoyant with major regulatory reforms underway. Public listings of Saudi Aramco, Saudi Exchange, and other large government-related entities are expected soon.

Tadawul - the KSA stock exchange - is also on its course to join MSCI’s Emerging Market Index and has been swift in improving the regulatory environment and allowing foreign investments to be in line with global standards.

In the last quarter of 2017, Tadawul raised an announced value of US$110 million, while KSA's parallel market, NOMU, saw a decrease by 48% in 2017 with no IPOs in Q317 or Q417. However, effective from 1 January 2018, the Saudi Capital Market Authority (CMA) has allowed direct investments by non-resident foreign investors on NOMU.

Mayur Pau, MENA Financial Services IPO Leader, EY, says: “The CMA’s recent updates could encourage more small and mid-cap companies to go public in 2018, leading to a rebound in IPO listings on NOMU alone.

"The ADNOC IPO is one of the most successful regional issuances in recent times and it is likely to pave the way for more public listings from the MENA energy sector.”

Pau also noted that the IPO activity pipeline for the UAE and Kuwait look promising with major government-owned firms announcing their plans to go public within the next two years.

Collectively, the GCC markets witnessed six IPOs deals in Q417, recording a volume increase of 200% from the same period last year, while the deal value rose by over 10 times the capital raised in the previous year, reaching US$2.4 billion in Q417. The real estate sector raised the highest capital with US$1.3 billion, closely followed by the energy sector with US$850.9 million. The real estate investment trust (REIT) fund came third with capital of US$110 million raised.

Activity in the global IPO market surged in 2017 with the listing of 1,624 deals, raising an aggregate capital of US$188.8 billion. EY said this is a significant growth trajectory in the number of deals listed (up 49%) and capital raised (up 40%), in comparison to 2016. The numbers also make 2017 the most active year for IPOs since 2007 and the global IPO market is projected to grow even further in 2018.

“With a large number of companies already gearing to go public in the next couple of years and that one of the world’s largest IPO may come from the MENA itself, the outlook for regional IPO activity remains robust,” concludes Hughes.

High early-stage M&A activity in APAC in Q416

• Early-stage mergers and acquisitions (M&A) activity in the Asia Pacific (APAC) region is showing the highest increase at 44% compared to the same period last year
• India outperforms other APAC countries with yyear-over-year (YoY) growth of 100%
• Globally, 1H 17 M&A announcements are expected to increase by 6%

Source: Intralinks. Cover for the report.

The Intralinks Deal Flow Predictor, a forecast of future M&A announcements, predicts a 6% increase in the total number of M&A deals to be announced globally in 1H17 compared to 1H16, setting a new record in the number of global announced deals in the first half of a year.

The APAC region, with 44% YoY growth in early-stage M&A activity in Q416, is the top performing region for early-stage M&A activity, and is set to contribute heavily to 1H17’s expected record deal count. Strong performances from India, Southeast Asia, Australia and Japan are predicted. This level of YoY growth in early-stage M&A activity is the highest in APAC for almost five years. In terms of sectors, financials, consumer & retail and healthcare will fuel the growth in APAC M&A deals announced in Q217.

“While almost all parts of APAC showed double-digit YoY growth, India once again proved to be the fastest growing country in the region, a position it has held for three consecutive quarters, with YoY growth of 100%,” said Philip Whitchelo, VP Strategy and Product Marketing at Intralinks.

"Other parts of APAC contributing to the significant growth that we are seeing in early-stage M&A activity include Southeast Asia which is up 49%, Australia up 47%, and Japan up 33%."

The Intralinks Deal Flow Predictor forecasts the number of future M&A deal announcements by tracking early-stage M&A activity – sell side M&A transactions across the world that are in preparation or have reached the due diligence stage. These early-stage deals are, on average, six months away from their public announcement. The Intralinks Deal Flow Predictor has been independently verified by Decision Economics as an accurate predictor of future changes in the global number of announced M&A transactions.

Interested?

Download the Intralinks Deal Flow Predictor report

ManpowerGroup forecasts hiring demand upturn in Q415 for Singapore

Job seekers in Singapore can expect an upturn in opportunities during the October to December period as Singapore employers report steady hiring prospects for 4Q 2015, says ManpowerGroup, which provides workforce solutions.

Of the 665 employers surveyed, 16% forecast an increase in staffing levels, 3% anticipate a decrease, and 69% expect no change. Once the data is adjusted to allow for seasonal variation, the Net Employment Outlook stands at +12%. However, while the forecast remains relatively stable when compared with the previous quarter, it declined by 4% year-on-year.

Linda Teo, Country Manager, ManpowerGroup Singapore says: “The year-on-year Outlook decline, from 16% to 12%, indicates that while employers expect the hiring pace to remain positive, uncertainties such as weak global demand for exports and China’s sluggish economy have dampened real hiring intentions in our trade-dependent economy.”

Employers in all seven industry sectors surveyed - Finance, Insurance & Real Estate; Manufacturing; Mining & Construction; Public Administration & Education; Services; Transportation & Utilities; and Wholesale & Retail Trades - anticipate an increase in staffing levels during the October-December period. The strongest labour markets are expected in both the Finance, Insurance & Real Estate sector and the Public Administration & Education sector, with outlooks of 18% growth.

Respectable job gains are also forecast by employers in the Transportation & Utilities sector and the Services sector, who report positive outlooks of 16% and 14%, respectively, while the Mining & Construction sector outlook is a rise of 12%. Meanwhile, Wholesale Trade & Retail Trade sector employers report the weakest sector outlook for the second consecutive quarter, standing at an increase of 4%. 

Despite the cautious outlook for the wholesale and retail trade sectors, some additional hiring is still expected. Says Teo: “The year end is traditionally a busy period for retailers who have to cope with more demand from shoppers. So, more hiring of contingent workers in particular can be expected.”

When compared with the previous quarter, outlooks improved in four of the seven industry sectors, most notably by 5 percentage points in both the Transportation & Utilities sector and the Wholesale Trade & Retail Trade sector. Quarter-on-quarter, hiring prospects weakened in three sectors, including a decrease of 10 percentage points in the Services sector.

Hiring prospects weakened in six of the seven industry sectors when compared with 4Q of 2014. Considerable declines of 14 and 12 percentage points are reported in the Services sector and the Finance, Insurance & Real Estate sector, respectively, while Mining & Construction sector employers report a decrease by 5 percentage points. However, the outlook for the Manufacturing sector is 5 percentage points stronger.

More than 15,200 employers were interviewed in the Asia Pacific region. The strongest hiring plans in the region are reported by employers in India, Taiwan and Japan. Employers in India report bullish hiring intentions for the coming quarter, with a seasonally adjusted positive outlook of 41% – the strongest in the Asia Pacific region.

The weakest hiring climate is forecast in China. Based on seasonally adjusted figures, Chinese employers anticipate modest growth in staffing levels during the coming quarter, reporting an outlook of 5% more. The figure is the weakest reported by Chinese employers since 3Q 2009.

Interested?

The Manpower Employment Outlook Survey is available free of charge to the public through their local Manpower representative in participating countries. To receive an e-mail notification when the survey is available each quarter, register for a subscription online