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GCC IPO market needs boost
04 November 2013
Panellists discussed the state of capital markets in the GCC at the Middle East Awards and Summit 2013. Hardeep Dhillon reports
Emirates NBD Asset Management
Qatar National Bank
The lack of initial public offering (IPO) issuance in GCC is a big issue for the region, according to panellists speaking at the Global Investor/ISF Middle East Awards and Summit 2013.
Yong Wei Lee, head of Mena equities at Emirates NBD Asset Management, said there is not a lot of diversity across companies that issue IPOs. He said that government registered entities is one avenue that could increase supply.
Ajay Kumar, assistant general manager, asset management division at the Qatar National Bank, added that the GCC markets needed to increase free float levels of companies’ share capital and that they also need a larger investor base. He said that while the issuance pipeline looked robust, it is actually a long pipe where not much is happening.
Afa Bora, head of asset management at Amwal, said that it was hard to see many companies borrowing significantly in the debt capital markets and that the equity markets seemed more interesting.
Lee said that debt issuance has been strong from the UAE. Kumar noted that the UAE is the largest borrower of bonds in the region and that Dubai’s improvement in credit quality, with its credit default swap spreads dropping from 800bp in 2008 to around 200bp, bodes well.