Luberef, Aramco set tone for hot 2023 IPO listings in Gulf

Al-Monitor Pro Members

Samuel Wendel

Senior Market Research Analyst, Al-Monitor

Dec. 12, 2022

Amid a global IPO slowdown, the Middle East was an outlier in 2022: listings boomed in the UAE and Saudi Arabia, fueled by governments offloading stakes in state-owned companies. The headliner: a $6.1 billion IPO by the Dubai Electricity & Water Authority (DEWA) in April. This IPO bonanza should continue into early 2023. There’s a pipeline of listings on the horizon, while significant firms continue going public into 2022’s final weeks. That said, declining oil demand could undermine the local market and several recently listed companies in the Gulf are already trading below IPO prices. Looking ahead to early 2023, the next phase of the Gulf’s IPO wave will largely rest on the shoulders of a giant: Saudi Aramco. Its refining unit Luberef expects to raise $1.32 billion from an IPO and begin trading on Saudi’s Tadawul exchange by early 2023. Meanwhile, its trading arm Aramco Trading is also exploring a listing slated to arrive in early 2023.  

Scenario 1: Gulf IPO activity starts hot in 2023 thanks to more landmark offerings.

Luberef’s trading debut and listings by Aramco Trading and others keep the IPO boom rolling. That bolsters confidence among investors and potential issuers despite global economic woes, positioning the Gulf to continue producing IPO riches during 2023.  

That said, it’s difficult to foresee MENA’s IPO market reaching new highs in 2023. Despite a phenomenal year for listings, a big chunk of 2022 IPO proceeds came from DEWA in H1, while investor appetite for some newly listed firms now appears to be flagging too.  

Scenario 2: The IPO boom evolves and expands across MENA.

More family-owned businesses list, helping sustain elevated IPO activity in the UAE and Saudi Arabia. Simultaneously, regional neighbors such as Egypt and Oman push listings of state-owned firms, seeing an IPO uptick across the region.  

Still, there was little activity on regional exchanges outside the UAE and Saudi Arabia in 2022. For the IPO market to stay hot those countries will likely need to continue producing large offerings.  

Scenario 3: The Gulf IPO window snaps close in 2023.

Global economic turmoil bites local economies as oil demand fades. New Gulf listings disappoint in coming months and the pipeline dries up, with expected listings cancelled.  

However, many are bullish that this IPO wave will continue into 2023, with plenty of companies tapping banks to explore listings. A gradual slowdown in activity seems more likely than a sharp decline.  

Samuel Wendel is a senior market research analyst with Al-Monitor covering economic, tech and business trends across the Middle East. He has previously served as a journalist with Forbes Middle East and Wamda, where he reported on key industry developments spanning a range of sectors in the region.