Released on: October 27, 2008, 2:50 am

Press Release Author: Nasira

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Press Release Summary: # Saudi Arabia and then the UAE top the regional tables by
capital raised in Q3, 2008
# Saudi Arabian Mining Company IPO was the largest in the world by capital raised
# Globally, IPO activity falls to lowest levels since 2003; funds raised down 66% on
previous quarter


Press Release Body: - Middle East markets resisted the dramatic global downturn in
the IPO market by raising US$3.61 billion in the third quarter of 2008 from 12
initial public offerings (IPOs) as compared to US$ 4.72 billion from 13 IPOs in the
second quarter of 2008. Though capital raised was down 23 per cent in the region
than in the previous quarter, regional markets fared much better compared to global
markets.
Funds raised globally were down 66 per cent and there have been 108 fewer deals, the
lowest activity level seen since 2003, following the dotcom collapse, according to
the quarterly Global IPO update from Ernst & Young, the region's leading
professional services firm.
Five IPOs from the Middle East entered the list of top 20 global IPOs by funds
raised in the third quarter. The Saudi Arabian Mining Company IPO was the largest in
the world by capital raised with US$2.467 billion. Other regional IPOs in the top 20
list by capital raised included the UAE's Drake & Scull with US$333 million, the
UAE's Damas International with US$226 million and two Saudi companies - Astra
Industrial Group with US$248 million and Methanol Chemicals/ CHEMANOL with US$193
million.
Azhar Zafar, Head of Mergers & Acquisitions, Ernst & Young Middle East, said, "Saudi
Arabia was placed second globally in terms of funds raised by any country with
US$3.0 billion, equalling 23 per cent of the global IPO market. China and Australia
were placed first and third with 25 per cent (US$3.3 billion), and 10 per cent
(US$1.3 billion) respectively. The UAE came in second in the MENA region with US$600
million, equivalent to 5 per cent of global capital raised."
From the total IPOs, Saudi Arabia hosted three of the IPOs whilst the UAE hosted two
IPOs. However, the leader in the number of IPOs in the region was Jordan with six.
According to Phil Gandier, Managing Partner, Transaction Advisory Services, Ernst &
Young Middle East, "It is interesting to note that the deal threshold to make the
global top 20 has fallen significantly since 2007 when the minimum deal value
required to make the group was US$1.9 billion; this quarter it was US$119 million.
However, the region is dealing with the global downturn much better than
anticipated. While short-term performance will be affected, long-term outcomes are
still looking positive."
Global IPO activity has fallen to its lowest level since 2003. During the third
quarter of 2008, a total of 159 IPOs worldwide raised US$13.1 billion in capital.
This is the lowest level of quarterly activity - by number of deals and capital
raised - since the second quarter of 2003, which recorded 130 IPOs and US$6.8
billion in cumulative capital.
Aggregate data for the first three quarters of 2008 shows that the total number of
IPOs and value of funds raised (676, US$92.5 billion) globally has halved compared
with the same period over 2007 (1388, US$185.0 billion). In addition 242 IPOs have
been postponed or withdrawn in 2008 to date compared with 169 during the total of
2007.
Gil Forer, Global Director of IPO initiatives at Ernst & Young, says: "In the wake
of turbulent economic times, we have understandably seen IPO activity slow. However,
we know from previous experience that markets do eventually recover, for example
while the reasons for the internet bubble were different - recovery took around
three years. And importantly the IPO pipeline remains strong, geographically diverse
and of high quality. Companies that have put in the groundwork to go public are
well-positioned to take advantage of an IPO once market conditions improve."

- ENDS -


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