According to Ernst & Young's Q2 2011 MENA IPO Update, regional capital markets raised US$ 374.8 million in the second quarter of 2011, down by 51.7% from the US$ 775.4 million raised during the same period in 2010. However, this is still an improvement from the lows of US$ 24.14 million raised in the first quarter of 2011. A total of US$ 398.9 million has been raised in the regional capital markets in the first six months of this year compared to US$ 1,203 million in the first half of 2010, a decline of 66.8%.

Saudi Integrated Telecom Company (US$ 93.33 million) on the Tadawul, Northern Cement Company (US$ 7.05 million) on Amman Stock Exchange, TelNet Holding (US$ 8.7 million) in Tunisia and Societé de Travaux de Réalisation d'Ouvrages et de Construction Industrielle (STROC Industries) (US$ 13.02 million) in Morocco were the single listings per country.

The UAE saw two listings on the Abu Dhabi Stock Exchange; these were Eshraq Properties Company (US$ 229.09 million) and National Takaful Company 'Watania' (US$ 23.58 million). Eshraq Properties is the first property company to list in the UAE since the May 2007 listing of Deyaar Development on the Dubai Financial Market.

The lack of any trend in the regional IPO market is underlined by the lack of confidence to list in these conditions. Fluctuation in funds raised every quarter is only a function of the strength and stability of the listed companies. It's likely that the next quarter may also see firms listing in the low single digits, according to Ernst & Young. The Middle East has seen 225 companies delay their offers or postpone going to market over the last three years. These companies would proceed with listing as the market sentiment improves and fund raising via the capital markets picks up.

The article above has been published as a part of Bank Audi`s MENA Weekly Monitor of Week 37 (2011). It can be accessed via Internet at the following web address : http://www.banqueaudi.com

Image credit: Arabian Business