GCC IPOs Set To Raise $8 Bn This Year.firm in the six-state Arab Gulf Co-operation Council (GCC GCC: see Gulf Cooperation Council.
(compiler, programming) GCC - The GNU Compiler Collection, which currently contains front ends for C, C++, Objective-C, Fortran, Java, and Ada, as well as libraries for these languages (libstdc++, libgcj, etc). ) region will raise $8 bn through initial public offerings (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) this year, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. new research, with more than 100 new deals in the pipeline despite a recent stock market slump. The FT on Oct. 17 reported Gulf Capital, an Abu Dhabi-based investment firm, as saying 17 companies had already raised $6.2 bn in 2006, up 45% on the same period in 2005. That figure could have been far higher had it not been for a steep correction on regional markets.
Saudi Arabia's main stock index has fallen by more than half since February, while Dubai's main index has dropped by two thirds since its peak in November 2005.
The FT quoted Per Larsson, chief executive of Dubai International Financial Exchange The Dubai International Financial Exchange (DIFX) is a stock exchange opened on September 26 2005 in Dubai, United Arab Emirates. DIFX aims to become the leading stock exchange between Western Europe and East Asia. (DIFX DIFX Dubai International Financial Exchange ), which was launched in 2005, as saying: "We have seen a delay in the IPO pipeline. But we have some more IPOs in the pipeline, and we hope it will pick up after Ramadan and in the first half of 2007". The Muslim holy fasting month of Ramadan, traditionally a quiet time for business, ended on Oct. 23. Indeed, while IPOs are rising, rights issues have dried up.
In 2005 a number of listed firms in the UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend. raised additional capital by selling more shares. First Gulf Bank raised $1.4 bn, while Emaar Properties Emaar Properties (Arabic: إعمار), the Dubai-based Public Joint Stock Company and one of the world’s largest real estate companies, is listed on the Dubai Financial Market and is part of the Dow Jones Arabia Titans Index. raised $3.9 bn. But bankers say investors appetite for such deals has waned. In the IPO market, though, appetite remains strong.
Imad Ghandour, Head of Research and Strategy at Gulf Capital, expects strong activity next year, based on the number of confirmed mandates given to regional investment banks. He said: "The positive momentum for new IPOs will continue into 2007". Recent issues include Emaar The Economic City, a Saudi real estate project backed by Dubai's Emaar Properties. It raised $680m to help finance a new town and port outside Saudi Arabia's Red Sea commercial hub of Jeddah.
So far, most of the money has been raised from GCC investors, as few IPOs are open to foreigners. But restrictions are easing, albeit gradually.
Newcomer DIFX has no restrictions on foreign ownership of shares, while established bourses and regulators are increasingly open to the idea of overseas investors. In January Kingdom Hotel Investments, a firm founded and controlled by Saudi billionaire Prince al-Waleed bin Talal Prince Al-Walid bin Talal bin Abdul Aziz Al Saud, born 7 March 1955 (Arabic: الوليد بن طلال بن عبد العزيز آل , raised $398.5m through a listing on DIFX which was open to all nationalities.
The FT quoted Simon Williams, economist at HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) in Dubai, as saying foreign fund managers were increasingly looking at GCC stocks, although few were writing large cheques just yet. He said: "We see a lot of interest in Gulf equity markets, but they are still on the edges rather than committing large sums of money". International money tends to prefer GCC debt, through syndicated loans, conventional bonds and Islamic bonds, known as sukuk.
The domestic IPO market is booming on the back of strong oil prices, which are at historically high levels despite falling by about a quarter since July (see OMT (Object Modeling Technique) An object-oriented analysis and design method developed by James Rumbaugh. See Rational Rose.
OMT - Object Modelling Technique ). Local investors have turned to new share issues after a bull run in 2004-05 saw price/earnings ratios on secondary markets rise to around 50, sparking the correction. This year's new issues have been based on more conservative valuations.
The report by Gulf Capital said another 134 GCC companies were actively considering an IPO in the near future, although not all were likely to follow through with the plans. The average value of Gulf IPOs in 2006 was $363m. Williams said GCC private sector issuers were increasingly likely to tap international investors. But many privatisations will remain off limits, as governments often sell shares in state assets to their citizens below market value "in order to distribute Gulf wealth".