Some Middle Eastern companies push IPO plans through 2024: BofA

DUBAI, July 5 (Reuters) – Several Middle Eastern companies are planning initial public offerings (IPOs) in 2024 instead of this year, a senior Bank of America official has said. (BAC.N) the executive said, amid concerns about a global recession.

The global IPO market has been in a doldrums since early 2022 when Russia’s invasion of Ukraine and a spike in inflation curbed risk appetite as investors worried about relentless interest rate hikes.

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

“The pipeline is encouraging, although we don’t expect a big wave for the second half. Many situations are more focused on early to mid next year, rather than the end of this year,” said James Palmer, Bank of America’s head of EMEA. . equity capital markets, when asked about expected IPOs this year.

He declined to discuss specific examples.

“Very importantly, the market view of when we will peak rates continues to be a dynamic assessment and is fueling uncertainty. This is a market challenge we need to address,” Palmer added.

The US Federal Reserve halted a 15-month hike cycle, the most aggressive in decades, at its latest policy meeting, but markets expect another rate hike at the Fed’s July meeting.

Some Middle Eastern issuers “feel very good about the belief in structural change in the region, in general terms; that is, the region’s commitment to developing and promoting capital markets, and commitments from local entities to show financial support for them,” Palmer said.

The wave of Gulf IPOs that began last year was fueled by state-run listing programs in Saudi Arabia, Abu Dhabi and Dubai.

Palmer added that he believed foreign investors continue to have an appetite for IPOs in the Middle East.

Reporting by Yousef Saba Editing by Mark Potter

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