Most Gulf Cooperation Council IPO aspirations in doubt due to COVID-19 impact

Capitalizing on the momentum from the Aramco IPO in Q4 2019, 15 companies have expressed an interest to get listed in the Gulf Cooperation Council (GCC) market in 2020 as against 2019, which saw around eight IPOs;

Nandakumar Premchand, Director at GlobalData, a leading data and analytics company, offers his view:

“Sulaiman Al Habib Medical Group (HMG) and Aman Real Estate Investment Trust were listed in Q1 2020. Bin-Dawood Holding Co and Supreme Foods in Saudi Arabia; MAG Development, Aafaq Islamic Finance and Bayt.com in UAE and The Oman Oil company are some of the major companies that have expressed an interest to go public.

“With the convergence of COVID-19 and the OPEC+ conflict, the impact on capital markets globally has been significant and so is the case with the GCC. Though OPEC+ decided to cut production by 9.7 million bpd, which is 10% of global production, many feel that the cut wasn’t good enough in current times.

“Global oil demand has fallen almost 30% and with the WTI May futures declining to almost negative US$40, on account of lack of storage space, it will be interesting to see how OPEC+ reacts to this development. Irrespective, this is expected to have a rippling effect on the GCC countries, which are primarily oil economies. As a result, it is only prudent that most of the IPO aspirant companies delay their bourse debut.”

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