UAE investors maintain a robust appetite for initial public offerings (IPO), with 84% expressing their readiness to invest in future IPOs.
The data is part of the findings from the UAE Investor Pulse Survey 2024 by Edelman Smithfield. The survey reveals that 73% of investors believe firms that have gone public in the past three years are fairly valued. Additionally, 71% of investors trust the bookbuilding process, indicating satisfaction with its transparency and effectiveness.
A majority of investors surveyed (71%) preferred new issuers with organic growth plans, with the top sectors of interest including real estate (51%), technology (41%) and healthcare (33%).
Additionally, approximately 67% of respondents agree that having two distinct exchanges benefits the UAE capital markets, offering more investment opportunities.
“It’s encouraging to witness the growing investor confidence in the UAE markets and their strong appetite for UAE IPOs,” said Simon Hailes, Managing Director and Head of Middle East at Edelman Smithfield. “However, to maintain this IPO momentum, it’s crucial for potential and existing issuers to prioritise transparent and consistent communication efforts.”
The survey indicated that two-thirds of investors expect transparency and effective IPO communication from issuers to make informed decisions. Moreover, 82% emphasise the importance of quality earnings. Overall, the key metrics included profitability (41%), a strong balance sheet (31%), and brand awareness (27%).
Despite the slower growth rate the global economy witnessed in 2023, the Middle East has seen a strong IPO momentum. The UAE alone contributed 58% of 2023 IPO proceeds in the GCC last year.
