A recent report by EY, a professional services network firm, indicates a positive outlook for initial public offerings (IPOs) in the Middle East and North Africa (MENA) region, forecasting 38 potential company listings and 22 fund offerings in 2025. Saudi Arabia is projected to lead this activity with 27 anticipated listings, reaffirming its position as a key player in the regional IPO market.

The analysis outlines that the United Arab Emirates (UAE) is set to see three IPOs while Qatar anticipates one listing in the same timeframe.

The growing interest from both regional and international investors can be attributed to substantial economic reforms and diversification efforts by countries in the Gulf Cooperation Council (GCC) to reduce their dependence on oil.

Gregory Hughes, EY's MENA IPO and transaction diligence leader, noted that the region's advancements in governance and environmental, social, and governance (ESG) practices enhance its appeal to investors.

Notable potential IPOs for 2025 include Panda Retail Co. and Riyad Capital from Saudi Arabia, as well as Etihad Airways and Amanat Holdings from the UAE.

Further afield in North Africa, Egypt has announced plans for five IPOs, while Algeria is expecting two listings in 2025. In December 2023, the Egyptian Cabinet revealed an initiative to expedite government offerings aimed at boosting private sector investment.

This strategy is reflective of the broader objective to enlarge the pool of publicly traded companies in Egypt.

The EY report underscores the significance of ESG commitments in relation to forthcoming IPOs.

A new law in the UAE, effective from May 2025, will mandate companies to report their carbon emissions and implement decarbonization strategies, thereby promoting renewable energy and carbon offset initiatives.

This regulation includes penalties for noncompliance and aims to encourage innovation in carbon trading aligned with the UAE's 2050 net zero goals.

The projected IPO activity in the GCC aligns with global forecasts; EY anticipates a robust IPO market in 2025 due to a supportive economic climate, favorable monetary policies, increased liquidity, and rising investor confidence.

The report, however, highlights challenges that may arise from fiscal and monetary policy shifts, geopolitical tensions, and the rapid advancement of artificial intelligence, which may also offer new opportunities.

EY urges businesses to adapt their strategies to evolving market demands, indicating that IPOs can serve as platforms for growth and innovation.

In the context of recent IPO activity, EY reported that the MENA region witnessed 54 IPOs in 2024, marking a 12.5% increase from 2023. These listings collectively raised $12.6 billion, representing a 17.6% rise in proceeds compared to the previous year.

Several major IPOs contributed significantly to these figures, including Talabat Holding plc, OQ Exploration & Production, and Lulu Retail Holdings, with the fourth quarter of 2024 seeing 25 IPOs that generated $7.9 billion—52% higher than the same period in 2023. Saudi Arabia accounted for 17 of the IPOs in 2024, dengan total proceeds reaching $1.2 billion, while the UAE saw significant listings on the Abu Dhabi Securities Exchange, including Lulu Retail Holding's $1.7 billion IPO.

Looking ahead, the MENA IPO market's performance in 2025 will be closely monitored as regional exchanges promote initiatives to further bolster family-owned businesses and support small to medium enterprises, strengthening market liquidity and infrastructure.