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Arab News
15-02-2025
- Business
- Arab News
Saudi Arabia to lead region's initial public offerings in 2025 — EY
RIYADH: The outlook for initial public offerings in the Middle East and North Africa region remains positive in 2025, with Saudi Arabia leading the market with 27 potential listings, according to an analysis. In its latest report, professional services network firm EY said the overall MENA region was expected to witness the listing of 38 companies and 22 funds in 2025, across a variety of sectors. Three listings are in the pipeline of the exchanges in the UAE, while Qatar is expected to witness one IPO. This comes as the Gulf Cooperation Council region has emerged as a hotspot for IPOs in recent years, fueled by robust economic reforms, diversification efforts away from oil dependence, and growing interest from both regional and international investors. 'The region continues to drive positive developments in areas such as governance and ESG to enhance its attractivity to local and international investors alike,' said Gregory Hughes, EY MENA IPO and transaction diligence leader. According to the analysis, Panda Retail Co. and Riyad Capital from Saudi Arabia, as well as Etihad Airways and Amanat Holdings from the UAE, are the notable companies considering an IPO in 2025. Outside the GCC region, Egypt has announced five IPOs for 2025, while Algeria has two businesses intending to list. In December, the Egyptian Cabinet announced plans to accelerate the government offerings program procedures in 2025 to maximize the private sector's economic role and attract more investments. The move from the government aligns with the nation's broader effort to expand the number of publicly traded companies and attract greater investment. The EY report set out how ESG goals remain 'a priority' in the Middle East, and this will have an impact on potential IPOs. It cited a new law in the UAE, set to come into force in May, requiring companies to report carbon emissions and adopt decarbonization strategies — including renewable energy and carbon offsetting. It sets penalties for noncompliance and encourages research and development. It also promotes carbon trading through a dedicated registry. 'These measures align with the UAE's 2050 net zero goals and are likely to influence IPO market dynamics, as companies prioritize sustainability to attract investors,' said the report. The expected listings activity in the Gulf is in line with global forecasts, with the IPO market on track for a 'strong performance' in 2025, according to EY. 'This is supported by a cautiously optimistic economic environment, increasingly accommodative monetary policies, heightened liquidity, valuation levels and investor confidence,' the report added. The firm said that while there were challenges — particularly around fiscal and monetary policies, geopolitical tensions, artificial intelligence and digital transformation — they also 'open the door to new opportunities.' EY called on businesses to focus on adapting their strategies to align with shifting market demands and 'leveraging IPOs as a platform to drive growth and innovation.' MENA IPO activity in 2024 EY revealed that markets in the MENA region witnessed a total of 54 IPOs in 2024, representing a 12.5 percent rise compared to 2023. These IPOs raised $12.6 billion in proceeds, also marking a 17.6 percent rise compared to the previous year. The year-on-year increase in proceeds for 2024 was impacted by a number of large-value IPOs such as Talabat Holding plc, OQ Exploration & Production and Lulu Retail Holdings that were listed during the last quarter of the year. The region continues to drive positive developments in areas such as governance and ESG to enhance its attractivity to local and international investors alike. Gregory Hughe, EY MENA IPO and transaction diligence leader 'The year 2024 ended on a strong note with 54 IPOs in total, the highest in MENA over the past seven years. The region has been one of the busiest when compared to the global market,' said Brad Watson, EY MENA strategy and transactions leader. He added: 'The momentum is expected to continue into 2025, with companies from various sectors announcing their intention to come to market. In addition, regional exchanges are actively working on initiatives to promote family-owned businesses and small to medium enterprises, aiming to strengthen the capital markets infrastructure and boost future liquidity.' Earlier this month, a report released by the Kuwait Financial Center revealed that Saudi Arabia led the GCC IPO market in 2024, raising $4.1 billion through 42 listings, the highest number in the region. According to that analysis, the GCC region saw an increase of 23 percent in IPO proceeds compared to 2023, reaching a total of $13.2 billion across 53 public offerings. The EY report states that the MENA region witnessed 25 IPOs in the fourth quarter of 2024 raising $7.9 billion — a 32 percent increase in number and a 59.4 percent surge in proceeds compared to the same period in 2023. Saudi Arabia dominated the region's IPO activity with 17 of the listings, and the Kingdom also raised $1.2 billion in proceeds during the period. Five IPOs took place on Saudi Arabia's main market during the fourth quarter, raising proceeds worth $1.1 billion. The remaining 12 IPOs happened on the Kingdom's parallel market Nomu, with proceeds valued at $119 million. Arabian Mills for Food Products Co. and United International Holding Co. marked the highest proceeds in Saudi Arabia at $300 million each. 'The last quarter of 2024 was a bumper quarter for the MENA region with 25 IPOs, making up 46 percent of the total IPO activity in that year. Nomu listings accounted for 50 percent, indicating robust activity in the junior Saudi market,' said Hughes. According to EY, Talabat Holding plc, which is listed on the Dubai Financial Market, raised the highest proceeds valued at $2 billion, contributing 25.8 percent of the overall number in the fourth quarter. The Abu Dhabi Securities Exchange welcomed two IPOs in the fourth quarter, with proceeds valued at $2 billion. In the ADX, Lulu Retail Holding raised $1.7 billion, followed by ADNH Catering at $235 million. The Bahrain bourse witnessed the Al-Abraaj Restaurants Group IPO that raised $23.9 million. Outside of the GCC region, there were two MENA IPOs in the fourth quarter: Compagnie Marocaine de Goutte a Goutte et de Pompage in Morocco and the United Bank in Egypt.
Arab News
05-02-2025
- Business
- Arab News
Saudi retailer Panda plans over 20 store openings in 2025, says COO
RIYADH: Saudi Arabia's Panda Retail Co. is set to open more than 20 new stores in 2025, maintaining its pace of expansion from the previous year, according to the company's chief operating officer. Speaking to Arab News at the Retail Leaders Circle Global Forum 2025 in Riyadh, Abdullah Al-Sabban said the company's focus this year will be on expanding within Saudi Arabia, particularly in Riyadh and remote areas. Panda's expansion supports its goal of sustainable retail growth through innovation while highlighting the resilience of Saudi Arabia's retail sector, which recorded SR37.4 billion ($9.97 billion) in sales in the third quarter of 2024 despite global economic challenges. Retail sales in the Kingdom are forecast to reach $161.4 billion by 2028, while the e-commerce sector is projected to exceed $13.2 billion by 2025, according to data platform Statista. 'Our theme for this year is 'expanovation.' Expanding the sites, stores, and locations is very important. But we're more focused on Saudi Arabia right now, more focused on Riyadh, and more focused on remote areas. We want to make sure that everybody deserves to have a Panda experience across the Kingdom,' Al-Sabban said. Self-funded growth Al-Sabban clarified that the company does not require external funding for its current expansion plans. 'When you're talking about 20 stores a year, that's not an area where you need to go and find funding and support,' he said. 'We want to ensure sustainable growth. We want to make sure we have the right number and continue growing at the same trend that we've been growing over the last year or two.' He noted that securing funding would only be necessary if the company aimed to double in size. 'Today, we're running at 200 plus stores. If you told me I want to grow to 400 in a year, then yes, we need to get a huge amount of money. But I think it has to be organic growth. You can't just go and expand because if we expand all our stores, we also need to expand our supply chain, logistics, commercial operations, and trucks,' he said. 'We need to make sure that we don't face failure as we expand in a very dramatic way. So, for now, we are going to keep it smooth and steady to ensure the right sustainability going forward,' he added. Regarding a potential initial public offering, Al-Sabban said Panda is still assessing the right time and approach for such a move. 'IPO is a very critical situation, and it's not easy to answer that, especially since we're part of a bigger group in Savola. There are some thoughts, but we're still discussing, negotiating, and understanding what would be the right time and approach for something like that,' Al-Sabban said. He said that going public is challenging and timing is key, emphasizing the need to ensure that an IPO is the right move for the organization. Market positioning In addition to opening new locations, Panda is investing in upgrading its existing stores through its customer experience and innovation program called CXR. He added: 'We are running both projects simultaneously, ensuring we improve our existing stores while opening new ones. Hopefully, by the end of the year, we will have opened more than 20 stores in new locations.' Addressing competition in the Saudi retail sector, Al-Sabban emphasized Panda's long-standing presence in the market. 'We've been one of the oldest retailers in Saudi Arabia. We've introduced the hypermarket model in Saudi Arabia. So, we've been leading the market. We know our customers,' Al-Sabban said. 'I think this is the challenge that people coming from outside will face — understanding the customer behavior and mindset.' He noted that while international retailers entering Saudi Arabia are targeting specific segments, Panda serves a broad customer base. 'Each outside supermarket coming in is focusing on a certain segment of customers. We are focusing on everybody in Saudi Arabia, from premium all the way to different levels,' Al-Sabban said. He noted that while building brand trust is a challenge for international players, Panda has already earned consumer confidence, with its loyalty program, boasting over 10 million users, reflecting a strong customer base. Al-Sabban said Panda remains committed to maintaining competitive pricing. 'On the other hand, we're working with our suppliers to ensure we have the best prices for our customers. Make sure that we maintain that perception of the lowest price and best quality,' Al-Sabban concluded. 'We want to make sure that we're always known for the best prices, the best quality, and the freshness of our products for our customers.'
