Middle Eastern firms push IPO plans to 2024

Inflation, interest rate hikes dampen risk appetite

DUBAI:

Several Middle Eastern companies are planning initial public offerings (IPOs) in 2024 instead of this year, a senior Bank of America executive said, amid worries of a global recession.

The global IPO market has been in the doldrums since the start of the Russia-Ukraine conflict in 2022 and a spike in inflation dampened risk appetite as investors fretted over relentless interest rate rises.

But the Middle East emerged as an IPO bright spot last year and has so far largely held its ground, with several companies listing on exchanges in the United Arab Emirates and Saudi Arabia in the first half.

“The pipeline is encouraging although we are not expecting a huge wave for the second half. Many situations are more focused on early or mid of next year, rather than the back end of this year,” said James Palmer, Bank of America’s head of EMEA equity capital markets. He declined to discuss specific examples.

The US Federal Reserve paused a 15-month hiking cycle – the most aggressive in decades – at its last policy meeting, but markets expect a fresh rate increase at the Fed’s July meeting.

Published in The Express Tribune, July 6^th, 2023.

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