Initial public offerings in Gulf Cooperation Council markets demonstrated remarkable strength throughout 2024, with 48 new listings raising $12 billion across the GCCs six countries over the course of the year. The region’s stock markets delivered impressive returns, with shares of newly IPO-ed firms gaining an average of 7% on their first trading day and climbing 15% soon after. This performance stands out against subdued IPO activity in other global markets, particularly the United States.
The surge reflects broader economic momentum across GCC nations, whose collective GDP surpassed $2 trillion by the end of 2024. International Monetary Fund projections place regional growth at approximately 4% annually through 2028, more than double the forecast for advanced economies.
GCC markets are set for a robust IPO pipeline in 2025, with Oman emerging as a key player alongside the United Arab Emirates and Saudi Arabia. Oman’s OQ Exploration and Production’s planned $2.03 billion listing on the Muscat Stock Exchange signals the market’s potential for substantial offerings.
Technology-focused companies are expected to dominate upcoming listings, particularly those bridging tech with high-demand sectors like education, health care, and logistics. The UAE’s food delivery market, projected to reach $67.12 million by year-end with a 5.55% annual growth rate, exemplifies the region’s digital transformation momentum.
Tech firms are increasingly viewing IPOs as strategic tools for debt management, marketing expansion, and technological advancement in new markets.
Equities-based financing providers like EquitiesFirst could offer investors additional options for participating in these expanding markets.
Unprecedented Investor Response to Regional Offerings
Recent IPOs highlight extraordinary levels of investor interest. When Lulu Retail Holdings, the GCC’s largest retail chain, launched its Abu Dhabi IPO in November, the company received $37 billion in orders within one hour of opening its books. This overwhelming response enabled Lulu to increase the offering size to $1.72 billion. Similarly, supermarket chain Spinneys attracted $19 billion in orders for its $375 million Dubai listing.
The technology sector has joined this wave of successful offerings. Online food delivery service Talabat raised $2 billion in what became 2024’s largest global technology IPO. This milestone listing marked the first technology sector IPO on the Dubai Financial Market, suggesting broadening opportunities in a region traditionally dominated by energy and financial services.
Market Integration and Sectoral Transformation
The GCC equity market has undergone fundamental changes since 2015, when Saudi Arabia first permitted non-GCC investors to participate directly in its market. The region’s representation in the MSCI Emerging Markets Index increased from 1.5% in 2014 to 6.5% by mid-2024, encompassing $490 billion in market capitalization across 72 stocks.
This expansion includes significant sectoral diversification. Over 120 new companies joined the Morgan Stanley Capital International GCC IMI index during the past five years, nearly doubling the total number of listed entities. These additions extend well beyond the traditional energy and financial sectors that historically defined GCC markets. Technology stocks currently represent just 1% of the GCC index, compared to over 25% in both developed and emerging market indices, pointing to substantial growth potential.
Financing Dynamics in a High-Demand Environment
Strong investor appetite creates a self-reinforcing cycle: Participants increase order sizes to secure meaningful allocations, which further intensifies demand. This pattern requires additional investor liquidity, potentially creating challenges for those who prefer not to sell off more long-term positions.
Traditional margin financing through banks and brokers often involves short terms, leverage limitations, and usage restrictions. Alternative structures such as equities-based financing could provide investors with more flexibility. EquitiesFirst, which has issued over $4.5 billion in loans globally since 2002, specializes in enabling investors to access capital against existing equity holdings while maintaining exposure to long-term positions.
Regional Market Characteristics
GCC equity markets offer distinct features for international investors. Most regional currencies maintain U.S. dollar pegs, potentially reducing foreign exchange risk compared to other emerging markets. Additionally, these markets demonstrate a relatively low correlation with both developed and emerging market indices, suggesting possible diversification benefits for global portfolios.
The correlation between GCC equities and oil prices remains more moderate than commonly assumed, supporting the narrative of successful economic diversification. This transformation continues through various national development initiatives, including Saudi Arabia’s Vision 2030 plan, which aims to increase private sector GDP contribution from 40% to 65%.
Future Market Development
The IPO pipeline appears robust heading into 2025, with over 50 Saudi Arabian companies awaiting listing approval. Anticipated offerings include Abu Dhabi’s Etihad Airways and Saudi Arabia’s medical procurement firm Nupco. Technology sector listings may accelerate, addressing current sector underrepresentation in regional indices.
Several factors could support continued IPO activity. The U.S. Federal Reserve’s anticipated interest rate reductions might benefit regional equity markets as fixed-term deposits mature and investors seek alternative investments. Government economic diversification programs continue generating new listings across various sectors.
While GCC markets have significantly improved accessibility and attracted increased foreign investment, liquidity levels remain below those of major emerging markets. This factor affects both primary market participation and secondary trading strategies. Foreign institutional investors have shown growing confidence in the region as economic fundamentals take precedence over historical perceptions of geopolitical risk.
The UAE has drawn particular attention for its business-friendly environment and diverse range of IPO candidates beyond state asset sales. The combination of strong offering performance, expanding sector diversity, and available financing options presents opportunities for sophisticated investors in GCC equity markets. As regional capital markets mature, alternative financing structures like those offered by EquitiesFirst may increasingly facilitate market access and investment strategies.
