DOHA: Mena recorded private equity activity worth $2.6bn and IPOs worth $914m during the first half of 2015 (H1, 2015). The staggering figures come on the back of a steady economic outlook for the region, which is forecasted at 2.4 percent in 2015 for oil-exporting countries.
Analysing wealth vehicles in the region, Al Masah Capital, one of the leading asset management firms in the Mena, noted the region witnessed a total of 16 private equity (PE) deals worth $2.67bn during H1, 2015 compared to twenty-six deals worth $128.7m in H1, 2014, the deal value has been higher compared to the same period of the previous year.
Saudi Arabia and the UAE both witnessed the largest number of deals in H1, while Algeria led in terms of value.
Commenting on global private equity market, Al Masah Capital founder and CEO Shailesh Dash said, “Our experience in market research suggests a pickup in PE activity during H2 with stabilisation in oil prices, especially in consumption-led sectors such as healthcare, education, retail and F&B. The UAE, Saudi Arabia, Lebanon and Egypt are expected to be frontrunners in PE activity during the second half of 2015.”
Sectors like IT, retail and healthcare followed by telecom, financial services, industrial manufacturing, food and agriculture, oil and gas and media observed dynamic movements in private equity during H1 2015. A total of four exit deals were reported during H1, with Egypt, Jordan, Lebanon and the UAE witnessing one deal each. Of the four exit deals, two deals, worth $36.21m, were in real estate.
In terms of fund raising activities during the period, the Mena region undertook 16 IPOs worth $914.9m. As for size, Egypt-based industrial manufacturing firm ASEC Company for Mining raised the largest amount with $150m, followed by Saudi Company for Hardware ($134.4m) and GB Auto S.A.E. in Egypt ($127.1m). Country-wise, Egypt recorded seven IPOs, the largest during the period, followed by four in Saudi Arabia. In terms of value, Egypt and Saudi Arabia commanded IPOs worth $304.1m and $279.7m respectively. Financial services led in terms of volume and value, with six IPOs worth $294.5m, followed by industrial machinery with four offerings worth $294.3m.
The global economic activity continues to show strength. Al Masah Capital views this as substantial fuel to ignite economic growth within the Mena region, thereby providing a positive outlook for investments in major sectors such as IT, oil & gas, retail and real estate.
Surveying wealth creating vehicles and funds in the region, IMF recorded a growing economic landscape in the Middle East and North Africa despite a slump in oil prices and increasing regional conflicts.
Oil-exporting countries shall remain steady at 2.4 percent in 2015, while growth in oil-importing countries will strengthen from 3.0 percent in 2014 to 4.0 percent in 2015, supported by the ongoing recovery in the Eurozone’s improved domestic confidence and more accommodating policies.
The international body also posed a growth forecast for GCC at 3.4 percent, while the non-GCC Mena countries are expected to register 2 percent growth in 2015.
The recent economic developments entailing robust growth in non-oil sectors in the GCC, driven by diversification strategies employed by the region’s governments, will help partially offset the decline in oil prices.
The Peninsula
