Saturday 02 / May / 2026
Muscat: Oman’s reforms aimed at privatisation of government assets are expected to lead to an increase in initial public offering (IPO) activity over the coming years, a report reveals.
The Aman REIF IPO on the Muscat Securities Market (MSM), which raised US$52.5 million, was the first Middle East and North Africa (Mena) IPO of 2020, according to the EY Mena IPO Eye Q4 2020 report.
The next IPO for the Sultanate, Oman Real Estate Fund units, were listed on Sunday for trading in the parallel market on the Muscat Securities Market (MSM), with a capital of OMR65.5 million divided into 654.8 million units.
The report further added that one of the most anticipated listings from Oman is of OQ (formerly known as Oman Oil and Orpic Group), the government-owned global integrated energy company. They had announced in late 2019 that they were planning to IPO 20 per cent to 25 per cent of their shares in 2020; however, the listing did not materialise during 2020 due to the volatility in oil prices and the impact of the COVID-19 pandemic.
In the fourth quarter (Q4) 2020, they announced plans to invest in alternative energy projects in Oman to further enhance their IPO story.
Matthew Benson, EY MENA Strategy and Transactions Leader, says: “A decline in economic growth and significant disruption across various industries caused by the COVID-19 pandemic, together with a decrease in demand for oil, had a considerable impact on Mena stock performances in 2020.”
“Markets were also impacted at a global level. Market volatility in the first half of the year was higher than at any time since the global financial crisis, although it quickly subsided, and the latter half of the year presented some strong IPO market performances.”
“As 2021 begins, we believe that continued fiscal stimulus measures, an abundance of liquidity and growing confidence in COVID-19 vaccination programmes will sustain positive IPO momentum,” he further added.
Also, Oman announced several measures aimed at reducing their spending and raising revenues primarily through taxes. A value-added tax (VAT) of 5 per cent will be implemented in April 2021, and Oman is also expected to start implementing an income tax on high earners by 2022, an unprecedented move in the Gulf Cooperation Council (GCC) countries, the report said.
Gregory Hughes, EY Mena IPO and Transaction Diligence Leader, concludes: “Although Mena IPO activity remained relatively quiet in 2020, several regulators across the region announced positive regulatory changes during the year that bode well for future and existing public companies.”
“As we start 2021, there are reasons for renewed optimism, and we see a strong IPO pipeline in key Mena markets and expect activity to pick up gradually during the new year. We have also seen some interest in mergers with US-listed Special Purpose Acquisition Companies (SPACs) in recent months following some limited activity in this area in the last two years from the region,” he added.
Mena IPOs
According to the EY Mena IPO Eye Q4 2020 report, the region saw nine IPOs raise proceeds of US$1.86 billion, a fall of 40 per cent in total issuances and 94 per cent in total proceeds when compared with 2019. Out of the nine issuances, six were in the real estate sector, of which two were real; estate investment trusts (REITs), with the remaining in the health care, consumer staples and insurance sectors.
Despite a subdued annual picture, Q4 2020 rebounded after a quiet second quarter (Q2) and one IPO in the third quarter (Q3), with four IPOs in the Mena region raising US$925 million in total. Although the number of IPOs decreased by 33 per cent and proceeds were down 97 per cent compared with the same quarter in 2019, Q4 did have the highest proceeds of 2020.
Globally, IPO numbers continued to pick up with 1,363 IPOs taking place in 2020, a 19 per cent rise when compared with the previous year. Additionally, proceeds increased by 29 per cent from 2019, rising to US$268 billion – the highest proceeds since 2010’s record of US$290.2 billion raised via 1,361 IPOs.
Despite a drop of nearly 30 per cent earlier in 2020, the Tadawul recovered to end 2020 with a positive index return of 3.6 per cent, which was aided by the recovery in crude oil prices.
The Egyptian Exchange (EGX) saw the biggest decline among the observed indices, having lost 22.3 per cent. The Qatar Stock Exchange (QSE) and Abu Dhabi Securities Exchange (ADX) both ended the year relatively flat, while the Dubai Financial Market (DFM) and Boursa Kuwait indices both fell by 10 per cent and 13 per cent respectively during the same period.
Equity markets in the Mena region experienced high volatility and average daily trading values increased significantly across the main exchanges.
Saudi Arabia leads IPO market
Saudi Arabia continued to have the most active IPO market in the Mena region in terms of both issuances and proceeds. Tadawul was Mena’s top listing venue for the year with four listings totalling US$1.45 billion, which represented 78 per cent of the total amount raised by Mena IPO candidates in 2020.
The fourth quarter in 2020 was the strongest quarter for IPOs based on proceeds, primarily due to the listing of BinDawood Holding (US$584 million), which was the second-largest listing of the year after Dr Sulaiman Al-Habib Medical Services Group Company (US$701 million) listed in the first quarter (Q1) 2020. Both listings were on Tadawul’s main market.
