MENA IPO EyeQ3 2018

2 MENA IP0 Eye Q2 2018

Exchanges by capital raised — Q3 2018

Key trends

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• In the third quarter of 2018, the MENA region witnessed four IPOs raising US$349.9m, compared with nine IPOs (of which four were REIT listings) raising US$881.5m in Q2 2018.

• Saudi Arabia led the MENA IPO activity in Q3 with the IPO of Leejam Sports Company on the Saudi Stock Exchange, which raised US$220.6m, the biggest IPO in the quarter. In the previous quarter, four companies went public (of which three were REIT listings) on the Tadawul.

• Several companies and entities across MENA have delayed their plans for IPOs in 2018, due to various factors including (but not limited to) regulatory and global trade concerns and unfavorable market conditions in a rising interest rate environment.

• In the case of the Muscat Securities Market (MSM), a single IPO for Dhofar Generating Company in the power and utilities space raised US$52.0m in Q3 2018. Clarity in Oman’s regulatory processes in the power and water sectors creates transparent competition in the sectors encouraging developers and investors, with as many as six power generation and water desalination companies planning IPOs within three years.

• In Egypt, in Q3 the IPO of Cairo for Investment & Real Estate Development Company raised US$69.7m. The Government’s IPO program strengthened the prospects of IPO issues in Egypt.

• Following a year-long gap, the Tunis Stock Exchange saw the IPO of Tunisie Valeurs in Q3 2018 raising US$7.6m. The improved classification of Tunisia by the FTSE Russell and MSCI, along with the World Federation of Exchanges (WFE) member status the exchange formally received in October 2018 has reinforced the attraction of Tunisia for foreign investment.

• Globally, IPO activity saw a significant slowdown in Q3 2018, with 302 IPOs raising US$47.1b, marking a decrease of 15% and 2% respectively, compared with Q2 2018. This could be attributed to the current market and global trade uncertainties. Current market and investor confidence fluctuations are causing companies to delay or pull out of planned IPOs in Q4 2018 despite the recovery in oil prices.

Note:*Return is share price change from first trade date until 30 September 2018;**had not started trading as at 30 September 2018. Source: Thomson Eikon, CapIQ and press.SE: Stock Exchange

MENA IPO activity (Q1 2016 to Q3 2018*)

$598.0 $397.2 $197.2

$85.6

$369.3 $418.6$91.1

$2,341.0

$26.4

$328.5 $349.9$133.3

$31.5$198.8

$195.9

$262.6

$603.2$553.0

2

6

1

5

11

86

9

6

9

4

0

2

4

6

8

10

12

0

1,000

2,000

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18

Vol

ume

(num

ber

of IP

Os)

Capi

tal r

aise

d (U

S$m

)

Deals (US$m) REIT listings (US$m) Volume (number of IPOs)

MENA GCCMENA IPO Eye

Q3 2018 reviewFour deals (no REIT listings)(33.3% decrease on Q3 2017)

Two deals (no REIT listings)(66.7% decrease on Q3 2017)

Volume

US$349.9m(21.9% increase on Q3 2017)

US$272.6m (5% decrease on Q3 2017)Value

Saudi SE

US$220.6m(one deal)

Muscat SE

US$52.0m(one deal)

Egypt SE

US$69.7m(one deal)

Tunis SE

US$7.6m(one deal)

Issuer (exchange) Value (return (%)*)Leejam Sports Company (Saudi SE)

US$220.6m(-0.7%)

Cairo for Investment & Real Estate Development Co (Egypt SE)

US$69.7m(NA)**

Dhofar Generating Company (Muscat SE)

US$52.0m(-0.9%)

Top three issuers — Q3 2018 Top three sectors by capital raised — Q3 2018Sector Value

Consumer services US$220.6m(One deal)

Real estate US$69.7m(One deal)

Power and utilities US$52.0m(One deal)

*As at 03 October 2018.Note: IPOs (including REIT listings) have been considered in each quarter, based on the subscription closing date. Companies are included (re Nomu) from the date the Nomu segment was established,26 February 2017.

3MENA IP0 Eye Q2 2018

Summary of IPOs (Q4 2017 to Q3 2018)Quarter Issuer Size

(US$m) Sector Exchange

Q3 2018 — 25 Sep Cairo for Investment & Real Estate Development Co 69.7 Real estate Egypt SE

Q3 2018 — 14 Sep Tunisie Valeurs SA 7.6 Financial services Tunis SE

Q3 2018 — 16 Aug Dhofar Generating Company S.A.O.C. 52 Power and utilities Muscat SE

Q3 2018 — 7 Aug Leejam Sports Company 220.6 Consumer Services Saudi SE

Q2 2018 — 29 Jun RA International Group Plc 24.8 Construction London SE (AIM)

Q2 2018 — 21 Jun Shelf Drilling 225 Oil and gas Oslo SE

Q2 2018 — 3 Jun Mefic REIT Fund 237.5 Real estate (REIT) Saudi SE

Q2 2018 — 3 May Bonyan REIT Fund 175.9 Real estate (REIT) Saudi SE

Q2 2018 — 26 Apr Immorente Invest S.A. 44 Real estate (REIT) Casablanca SE

Q2 2018 — 24 Apr CI Capital Holding Co SAE 57.2 Financial services Egypt SE

Q2 2018 — 8 Apr Swicorp Wabel REIT 95.6 Real estate (REIT) Saudi SE

Q2 2018 — 8 Apr National Building and Marketing Co. 8.7 Construction Saudi SE

(Nomu)

Q2 2018 — 2 Apr Arabia Falcon Insurance Co. 12.8 Insurance Muscat SE

Q1 2018 — 25 Mar BPE Holding For Financial Investments 26.2 Financial services Egypt SE

Q1 2018 — 6 Feb SEDCO Capital REIT 173.3 Real estate (REIT) Saudi SE

Q1 2018 — 29 Jan AlNefaie- Umm Alqura REIT 93.2 Real estate (REIT) Saudi SE

Q1 2018 — 23 Jan Jadwa REIT Saudi 126.4 Real estate (REIT) Saudi SE

Q1 2018 — 14 Jan Al Rajhi REIT 113.8 Real estate (REIT) Saudi SE

Q1 2018 — 7 Jan Derayah REIT 96.5 Real estate (REIT) Saudi SE

Q4 2017 — 24 Dec Al-Tawfeek Leasing Company — Egypt 7.1 Financial services Egypt SE

Q4 2017 — 19 Dec AlAhli REIT Fund 1 110 Real estate (REIT) Saudi SE

Q4 2017 — 18 Dec Muscat City Desalination 16.4 Power and utilities Muscat SE

Q4 2017 — 7 Dec Abu Dhabi National Oil Company for Distribution 850.9 Oil and gas Abu Dhabi

SE

Q4 2017 — 7 Dec Ibnsina Pharma 87.6 Health care Egypt SE

Q4 2017 — 20 Nov National Life & General Insurance Company 55.1 Insurance Muscat SE

Q4 2017 — 16 Nov Emaar Development 1,313.40 Real estate DFM

Q4 2017 — 07 Nov Al Mashaar REIT 152.6 Real estate (REIT) Saudi SEQ4 2017 — 5 Oct Oman Qatar Insurance Company 10.4 Insurance Muscat SE

Note: SE — stock exchange. Sources: CapIQ and Thomson Eikon.

Select IPOs in pipelineIssuer CountrySaudi Stock Exchange (Tadawul) KSA

Saudi Aramco KSA

National Company for Learning & Education* KSA

AlAhli MSCI Saudi ETF KSA

Maarif REIT Fund* KSA

Brooge Petroleum and Gas Investment Co UAE

Tristar Transport LLC UAE

Emirates Global Aluminium UAE

Etihad REIT UAE

Azizi Developments UAE

Network International UAE

Alexandria Mineral Oils Company Egypt

Abu Qir Fertilisers Egypt

Heliopolis Housing Egypt

Alexandria Container and Cargo Handling Egypt

Eastern Tobacco Company Egypt

Sarwa Capital* Egypt

Musandam Power Co SAOC Oman

Oman Airports Management Co SAOC Oman

Qatar Aluminum (Qatalum) Qatar

Qatar Pharma Factory Qatar

Rayyan Water Qatar

Shamal Az Zour Al Oula KSC Kuwait

Kuwait Stock Exchange Kuwait

Integrated Holding Company Kuwait

*Listed in Q4 2018 and will be covered in more detail in the next edition.

Sources: CapIQ and Thomson Eikon.

Broader outlook• FTSE Russell has issued a statement that it plans to include

Tadawul as a secondary emerging market index in 2019. • In September 2018, MSCI signed an agreement with Tadawul to

jointly launch a tradable index in Q4 2018. The index is intended to function as a platform for investment instruments, covering exchange-traded fund (ETFs).

• Abu Dhabi Securities Exchange plans to roll out futures trading in 2019 to boost investments. The stock exchange is connecting with seven companies that have IPOs on their agenda.

• The MSCI could reclassify the Kuwait Stock Exchange as an emerging market in 2019. The stock exchange is currently a frontier market.

• The Government of Egypt plans to list public sector companies on its stock exchange. It also has plans to introduce an IPO program offering minority stakes of state-owned and private companies in various sectors in the next three to five years.

• Over the year, IPO activity in the MENA region has been slow from Q1 to Q3 2018. With the fluctuating oil prices, we see more companies delaying or putting their 2018 IPO plans on hold.

Source: CapIQ, Thomson Eikon and Press.

Regional stock market performance —YTD 2018 (%)

-40%

-20%

0%

20%

40%

Jan 18 Mar 18 May 18 Jul 18 Aug 18

Mar

ket

retu

rn

(per

cent

age

chan

ge)

Abu Dhabi SE (AD) Bahrain SE (BSE)Dubai FM (DFM) Qatar SESaudi SE (SASE) Egypt SEFTSE 350 Nomu

Note: Updated as at 28 June 2018 Source: CapIQ.

Exchange Q3 2018 index return Market cap (US$b)Saudi SE 10.70% 506.9

Qatar SE 16.20% 131.9

Abu Dhabi SE 13.80% 135.4

DFM -17.20% 75.6

EGX -6.10% 27.7

BSE -0.50% 21.1

FTSE 350 -4.00% 3274.5

Saudi SE (Nomu) -16.90% 7.2

Note: Return updated as at 05 October 2018; market cap updated as at 05 October 2018 Source: Thomson Eikon

Oil price movement (Q3 2018)

0

20

40

60

80

Sep 2017

Oct 2017

Nov 2017

Dec 2017

Jan 2018

Feb 2018

Mar 2018

Apr 2018

May 2018

Jun 2018

Jul 2018

Aug 2018

Sep 2018

OPEC price Europe Brent crude

Oil

pric

es (U

S$ p

er b

arre

l)

Note: OPEC — Organization of the Petroleum Exporting Countries, updated up to 28 September 2018.Source: OPEC and Energy Information Association (EIA).

Contacts How EY can help

Key events

• For any company considering an IPO on a MENA or international stock exchange, it is critical to map out the IPO value journey.

• As a first step to effective IPO planning, we recommend undertaking an IPO readiness diagnostic to identify the key gaps across several areas of the business when compared with best practice and stock exchange requirements.

• A key output of the IPO readiness diagnostic is a detailed road map of activities to address identified gaps, actioned with the assistance by EY professionals and other advisors.

• Effective IPO planning and execution will increase your chances of a successful IPO transaction, help improve your business, and save time and costs during the IPO journey.

EY IPO services

1 IPO readiness diagnostic Including various follow-up services to help address the IPO readiness gaps identified

2 IPO execution services Dependent on listing destination, including: financial due diligence, working capital reports, feasibility studies, valuation services, financial positions and prospects, MD&A section of prospectus drafting, comfort letters and project management services

EY has dedicated MENA IPO teams with experience in executing IPO services across key exchanges in MENA and international regions.

Mayur PauPartner — EY MENA Growth Markets and Financial Services IPO Leadermayur.pau@ae.ey.com+971 4312 9446

Gregory HughesPartner — EY MENA Transaction Advisory Services — IPO Leadergregory.hughes@ae.ey.com+971 4701 1851

Darrell TraynorAssociate Partner — EY MENA Transaction Advisory Servicesdarrell.traynor@ae.ey.com+971 4312 9446

7

IPO planning IPO execution Post-IPO

EY | Assurance | Tax | Transactions | Advisory

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EYG no. 011852-18GblED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

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Name of the event Date Theme

EY KSA Wealth Asset Management Roundtable

Feb 2019 TBC

Mergermarket MENAMergers 2019

April 2019 This flagship event will give you the opportunity to hear from expert speakers who will discuss and debate M&A activity inthe Middle East and the wider emerging markets. Sessions will also explore future investment opportunities for dealmakers over the next year.