Post on 27-Jun-2015
transcript
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Partners in Growth
IPO MARKET DURING 2007
GULF CAPITAL RESEARCH GROUP
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2Partners in Growth
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Outline
1. Macro Overview Of The GCC
2. Overview Of The IPO Market In The GCC
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MACRO OVERVIEW OF THE GCC
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4Partners in Growth
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“GCC IPO Market”Strong Growth in the GCC
Prospects of strong economic growth have continued
7.1%
4.4%4.5%
6.1%
7.1%
8.4%
9.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Qatar UAE Bahrain Oman KSA Kuwait GCC
Sources: IMF World Economic Outlook (October 2007), Gulf Capital
2006-2007 GDP GROWTH
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5Partners in Growth
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“GCC IPO Market”Stock Market Performance
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Nasdaq FTSE-100 Bahrain Oman Kuwait Qatar UAE KSA
2004
2005
2006
2007-to-date
Sources: Nasdaq, LSE, BSE Index, MSM-30, KSE Index, DSM index, NBAD index, Tadawul
2004-2007 Stock Market Performance
GCC stock markets have reversed the downward trend of 2006, increasing by an average 36% during 2007-to-dateSince the beginning of 2007, all GCC indices witnessed a positive trend
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OVERVIEW OF THE IPO MARKET IN THE
GCC
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7Partners in Growth
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“GCC IPO Market”Rising Number Of IPOs
9 1223 23
0
20
40
60
80
100
120
95-03 '04 '05 '06 '07-10
Number of IPOs rose during last couple years in GCC …
Sources: Zawya, Gulf Capital
Number Of IPOs In The GCC
Number
IPOs include privatization
8
8Partners in Growth
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“GCC IPO Market”Rising Number Of IPOs
9 1223
3323
0
20
40
60
80
100
120
95-03 '04 '05 '06 '07-10
33 IPOs have been closed during 2007, against 23 during 2006…
Sources: Zawya, Gulf Capital
Number Of IPOs In The GCC
Number
IPOs include privatization
Closed 2007
9
9Partners in Growth
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“GCC IPO Market”Rising Number Of IPOs
9 1223
33
42
23
0
20
40
60
80
100
120
95-03 '04 '05 '06 '07-10
During 2007-2010, 42 IPOs have assigned a manager …
Sources: Zawya, Gulf Capital
Number Of IPOs In The GCC
Number
IPOs include privatization
Closed 2007
Manager assigned
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10Partners in Growth
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“GCC IPO Market”
9 1223
33
42
41
23
0
20
40
60
80
100
120
95-03 '04 '05 '06 '07-10
And another 41 have announced their intention to conduct an IPO
Sources: Zawya, Gulf Capital
Number Of IPOs In The GCC
Number
IPOs include privatization
Closed 2007
Manager assigned
Announced
Total IPOs during the 2007-2010 period should exceed 116
116
Rising Number Of IPOs
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11Partners in Growth
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“GCC IPO Market”2007 IPOsSize Of Offering
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
DP World
Saudi Kayan Petrochemical Co
Dar Al Arkan Real Estate Dvpt Co
Deyaar Development Co
Kingdom Holding Co
Air Arabia
J abal Omar Development Co
Al Khalij Commercial Bank
Galfar Engineering and Contracting
Middle East Specialized Cables Co
Saudi Printing and Packaging Co
United International Transportation Co
Seef Properties
Saudi Vitrified Clay Pipe Co
Mediter and Gulf Cooperative Ins and Reins
Qatar and Oman Investment Co
Al Khaleej Training and Education
Malath Cooperative Ins and Reins
Trade Union Ins Co
Gulf Union Cooperative Ins Co
Al Sagr Saudi Ins Co
Arabia Ins Cooperative Co
Arabian Shield Cooperative Ins Co
Saudi United Cooperative Ins Co
Sanad for Cooperative Ins and Reins
Saudi IAIC Cooperative Ins Co
Saudi Indian Ins Co
Saudi Arabian Cooperative Ins Co
Allied Cooperative Ins Group
Al Ahlia Cooperative Ins Co
SABB Takaful
Saudi Fransi Cooperative Ins Co
Alahli Takaful Co
Source: Zawya
Average 2007 offering sizeUS$ 363 million
million
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12Partners in Growth
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“GCC IPO Market”Increasing IPO Size
Average IPO size increased by 25% during 2006 and by 11% during 2007
$401
$363
$327
$262
$128
$45
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
95-03 '04 '05 '06 '07 '08-10
Sources: Zawya, Gulf Capital
AVERAGE IPO SIZE
Based on available data, average IPO size is estimated to increase by 11% during 2008-2010
million+11%
+11%
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13Partners in Growth
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“GCC IPO Market”An Increase During 2007 In Amount Raised From IPOs
Total amount raised from IPOs has increased by 60% during 2007 relative to 2006
$12.0
$7.5
$6.0
$1.5
$0.4
$0
$2
$4
$6
$8
$10
$12
$14
95-03 '04 '05 '06 '07
Sources: Zawya, Gulf Capital
TOTAL IPOs OFFERINGS
billion
+60%
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14Partners in Growth
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“GCC IPO Market”… And More Will Be Raised In Coming Three Years
Of the 83 upcoming IPOs in 08-10, 42 “manager-assigned” IPOs and another 41 “announced” IPOs total an estimated $10 billion
$10.0
$12.0
$7.5
$6.0
$1.5
$0.4
$0
$2
$4
$6
$8
$10
$12
$14
95-03 '04 '05 '06 '07 '08-10
Sources: Zawya, Gulf Capital
AGGREGATE IPO SIZE
billionIncrease
dfrom
previousestimate
s
15Partners in Growth
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“GCC IPO Market”Markets Are Becoming More Diversified
Previous IPOs were mainly concentrated in a limited number of sectors
0 10 20 30 40 50 60 70 80
Financial Services
Oil and Gas
Real Estate
Construction
Transport
Power & Utility
Food
Telecom
Consumer Goods
Media
Industry
Logistics
Travel & Tourism
Conglomarate
Education
Agriculture and Food
Healthcare
Mining and Metals
2004-2007
Upcoming
Sources: Zawya, Gulf Capital
IPOs BY INDUSTRY
* Financial services include insurance IPOs
16Partners in Growth
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“GCC IPO Market”Markets Are Becoming More Diversified
0 10 20 30 40 50 60 70 80
Financial Services
Oil and Gas
Real Estate
Construction
Transport
Power & Utility
Food
Telecom
Consumer Goods
Media
Industry
Logistics
Travel & Tourism
Conglomarate
Education
Agriculture and Food
Healthcare
Mining and Metals
2004-2007
Upcoming
Sources: Zawya, Gulf Capital
IPOs BY INDUSTRY
* Financial services include insurance IPOs
… but upcoming IPOs are relatively expanding to new sectors
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17Partners in Growth
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“GCC IPO Market”Distribution Of Offering By Country
KSA attracted 26 of the 33 IPOs in the GCC during 2007 and UAE witnessed the largest amount of IPO with US$ 6.6 billion $1,803
$3,183
$1,316
$54
$1,037
$120
$6,559
$4,814
$389$156 $69 $0
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
UAE KSA Qatar Oman Bahrain Kuwait
2006
2007
Sources: Zawya, Gulf Capital
IPO AMOUNTS RAISED
million
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18Partners in Growth
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“GCC IPO Market”IPOs Outperformed Market
GCC markets increased by an average of 8% during 2006/07-to-date
Sources: Gulf Capital
2006-2007 STOCK PERFORMANCE
84.0%
7.0%21.0%
-14.0% -16.0%-35.0%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
Bahrain Oman Kuwait Qatar UAE KSA
Overall market
IPOs closed during 06/07-to-date
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“GCC IPO Market”IPOs Outperformed Market
Sources: Gulf Capital
2006-2007 STOCK PERFORMANCE
84.0%
7.0%
171.0%
113.0%
239.0%
21.0%
-14.0% -16.0%-35.0%
29.0%
454.0%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
Bahrain Oman Kuwait Qatar UAE KSA
Overall market
IPOs closed during 06/07-to-date
IPOs launched did better than overall stock performance, appreciating by an average of 201%
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20Partners in Growth
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“GCC IPO Market”Slowing Down Over-Subscription
Over-subscription levels during 2007 have decreased when compared to 2006 figures
6.3
48.2
73.069.0
7.0
0
10
20
30
40
50
60
70
80
95-03 2004 2005 2006 2007
Sources: Gulf Capital
OVER-SUBSCRIPTION PER IPO
x times
-87%
Stablefrom
previousestimate
s
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21Partners in Growth
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“GCC IPO Market”Demand Generated For IPOs
The average demand per IPO stood at US$ 3.4 billion at end-2007, compared to US$15.3 billion at end-2006 and US$15.7 billion at end-2005
$3.4
$15.3$15.7
$11.4
$0.1$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
95-03 2004 2005 2006 2007
Sources: Gulf Capital
AVERAGE TOTAL DEMAND PER IPO
billion
Projected 08-10offerings$10 B
Avg. 2007 demand per
IPO$3,411 M
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22Partners in Growth
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“GCC IPO Market”IPOs Are Sold At A Discount And Outperform The Market
During 2007, IPOs were sold at a discount to book value and to earnings
4.2
2.5
3.94.8
1.4
0123456
IPOs 04 IPOs 05 IPOs 06 IPOs 07 GCC stockmarket 07
Sources: Gulf Capital
PRICE TO BOOK VALUE
18.0
10.114.7
19.2
6.4
0
510
1520
25
IPOs 04 IPOs 05 IPOs 06 IPOs 07 GCC stockmarket 07
PRICE TO EARNINGS
Partners in Growth