w ww.pwc.com/me/capital-markets-w atch

GCC Capital Markets Watch Q3 2019

The GCC equity market continued to be quiet, with only one

company listing on the Kingdom of Saudi Arabia’s Tadawul. However, the region’s debt market was active and witnessed iconic

transactions during the quarter.

Even though all IPO activities in the region have been limited to the Kingdom of Saudi Arabia in 2019, we are expecting the UAE market

to pick up in the near future as multiple companies have announced their interest to go public and have initiated the groundwork for a

successful IPO. Tadawul has recently announced that it will soon allow the listing of foreign companies on its exchange, which will

further promote equity activity in the region.

During this quarter, Dubai became one of the largest global centresfor sukuk listings by value when global port operator, DP World,

listed sukuk worth USD 1.5bn and bonds worth USD 800m on Nasdaq Dubai.

The quarter also saw the first sovereign bond in two years issued by

the Emirate of Abu Dhabi, raising USD 10bn. Its positive credit rating and competitive return attracted significant amount of

investors’ interest. The Kingdom of Saudi Arabia also issued its first Euro denominated bond worth EUR 3bn.

Steve Drake

PwC Middle East Capital Markets, Partner

USD 93mraised from the only IPO in Q3

2019 across the GCC, as

compared to USD 484m in Q3

2018.

1 IPOin Q3 2019, down from three

IPOs in Q3 2018.

USD 10bnsovereign bond issued by

the Emirate of Abu Dhabi in

Q3 2019.

PwC | GCC Capital Markets Watch Q3 2019 |2

USD 1.5bnsukuk issued by DP World.

Initial Public Offerings (IPOs)A subdued quarter as multiple companies prepare for their respective IPOs.

Overview

Tadaw ul continued to be the only active market for equity

transactions in Q3 2019. Typical of the third quarter, GCC

market activity w as slow this year w ith just one IPO compared

to three in Q3 2018.

Proceeds of USD 93m w ere generated from the sole IPO,

representing a decline of USD 391m from Q3 2018 w hen USD

484m w as raised. We anticipate the coming quarter to be

signif icantly more active w ith the recent announcement of

Saudi Aramco's record breaking f lotation on Tadw aul, along

w ith many other companies w hich have expressed their

intention to list in 2019.

In addition, Tadaw ul is expected to allow the listing of foreign

companies on its exchange in an attempt to encourage IPO

activity.

Ataa Educational Co.

Sector: Consumer Services

Money raised: USD 93 million

Exchange: Tadawul

No. of shares offered: 12 million

| GCC Capital Markets Watch Q3 2019 | PwC3

337 48 138 179 953 902 1,603 2,500 185 1,1520

101471 274 0 37 400 210 234 2,455 430 463 484 1,027 58 866

93

2

3

1

3

2

7

2

5

1

4

1 1

2

1

10

5 5

8

4

5

3

5

1

2

1

0

2

4

6

8

10

12

0

500

1,000

1,500

2,000

2,500

3,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Vo

lum

e o

f IP

Os

Va

lue o

f IP

Os

(US

Dm

)

Value (USD m) Volume

58

702 4,000 1,439 782 3,300 2,404 1,016

9

16

6

4

28

17

4

-

5

10

15

20

25

30

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2013 2014 2015 2016 2017 2018 19 YTD

Vo

lum

e o

f IP

Os

Va

lue o

f IP

Os

(US

Dm

)

Value (USD m) Volume

GCC IPO trendsThe GCC equity market continued to be slow with a single listing in the quarter.

Figure 2: GCC IPO activity since 2013

Figure 3: GCC quarterly IPO activity since 2013

35

1,377

12

10,500

11,000

FY19

YTDFY18

YTD

14

7,000

7,500

2013

National

Commercial Bank

and Dubai Parks

and Resorts IPOs

Launch of NOMU

Parallel Market

ADNOC and Emaar

Development IPOs

PwC | GCC Capital Markets Watch Q3 2019 |4

2014 2015 2016 2017 2018 2019

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

% c

hange s

ince 1

January

2019

Tadawul MSM DFM

ADX QSI BAX

BKP

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

% c

hange s

ince 1

January

2018

Tadawul MSM DFM ADX QSI BAX BKP

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar April May June July Aug Sep

Market performanceBoursa Kuwait continued to outperform other GCC exchanges by cumulative total return, whilst Tadawul retreated to fifth position in Q3 2019.

2018

Source: Eikon (Thomson Reuter), Pw Canalysis

*The IPOs of Integrated Holding Co KCSC, National Building and

Marketing, Al Nefaie Umm Alqura REIT and Al Moammar Information

System Company have been excluded due to insufficient data.

Figure 4: GCC equity markets performance by cumulative total return since 1 January 2018

2019

Source: Eikon (Thomson Reuter), Pw Canalysis

(Bahrain) (Kuwait)(KSA) (Oman) (Dubai) (Abu Dhabi) (Qatar)

Figure 5: Share price performance of 2018 and 2019 GCC IPOs* by sector, relative to the respective all share index, from the IPO date to 30 September 2019

Figure 4a: GCC equity markets performance by cumulative total return since 1 January 2019

| GCC Capital Markets Watch Q3 2019 | PwC5

Jan Feb Mar April May June July Aug Sep

-9%

-33%

-5%

-90%

-5%

30%

55%

-100% -50% 0% 50% 100%

Real Estate

Financials

Energy

Consumer Discretionary

Industrial

Logistic

Education

Commercial and…Commercial and

Professional service

40.4

62.6

51.6

-

50

100

150

200

250

300

Q3 2019 Q2 2019 Q3 2018

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Proceeds raised (billions) Number of IPOs

Global IPOsAsia Pacific was the IPO leader in Q3 2019 in terms of proceeds and volume. EMEA activity suffered from continued geopolitical uncertainties and weakening of local economic fundamentals.

Figure 7: Top exchanges by % of total IPO proceeds raised

Source: Dealogic as at

30 September 2019

Q3 2019 w as quieter than expected for equity capital markets.

Volatility w as high against a backdrop of geopolitical tensions,

increased economic w eakness and doubts regarding central

bank action. The We Company w ithdrew its intended listing,

Peloton and TeamView er’s shares fell during their f irst day of

trading, and Budw eiser Brew ing Company APAC’s shares priced

at the low er end of the range.

All regions recorded a reduction in IPO activity in terms of both

proceeds and volume compared to Q3 2018. Globally, 226 IPOs

raised USD 40.4bn compared to 279 IPOs w ith proceeds of USD

51.6bn in Q3 2018 – a reduction of 19% in volume and 22% in

proceeds.

The Further Offer market performance continued to decline w ith

602 offerings raising total proceeds of USD 104.1bn in Q3 2019,

compared to 627 further offers raising USD 114.3bn in Q3 2018.

Asia Pacif ic dominated the quarter having the highest proceeds

raised and volume, helped by the new ly opened STAR Market in

China. The region accounted for 51% (USD 20.6bn) of proceeds

and 68% (153) of the number of IPOs. The Americas came

second, contributing 38% (USD 15.3bn) of the global proceeds

and 23% (53) of the global volume in the quarter. EMEA

transactions show ed a further decline, accounting for 11% (USD

4.5bn) of IPO proceeds, and 9% (20) of the number of

transactions in the quarter. On a year-to-date basis, the Americas

continued to lead by proceeds, helped by some sizeable IPOs in

Q2 2019 – most notably Uber, Avantor, Lyft and Pinterest.

Asset World Corp

Exchange: Thailand Stock

Exchange

Pricing date: 27 Sep 2019

Money raised:

USD 1.4bnFree Float:

22.5%

3

Figure 6: Global IPO activity

Figure 8: Top 3 global IPOs in Q3 2019 by proceeds

USD

226bn

PwC | GCC Capital Markets Watch Q3 2019 |6

USD

280bn

USD

279bn

Budweiser Brewing

Company APAC

Exchange: HKEX

Pricing date: 24 Sep 2019

Money raised:

USD 5.0bnFree Float:

10.8%

1

TeamViewer

Exchange: Deutsche Börse

Pricing date: 24 Sep 2019

Money raised:

USD 2.2bnFree Float:

37.5%

2

NASDAQ

Global

26%

Others

22%NYSE

22%

HKEX

12%

LSE Group

7%

DB3%

SSE4%

SZSE4%

GCC bond and sukuk issuancesA notable quarter for the GCC market with high value sovereign bond and sukuk issuances.

It has been an eventful quarter in the UAE debt market w ith DP

World issuing a USD 1.5bn sukuk and a USD 800m conventional

bond on Nasdaq Dubai, projecting Dubai into one of the largest

global centres for sukuk listings by value. DP World is the largest

debt issuer on Nasdaq Dubai, having raised an aggregate value

of USD 9.1bn in recent years.

During the quarter, the Emirate of Abu Dhabi sold USD 10bn of

bonds in a three part deal w hich w as its f irst offering in tw o years.

This experienced high demand due to competitive returns

compared to international central banks rates.

The Kingdom of Saudi Arabia has also issued sovereign bonds

during the quarter. The Kingdom raised EUR 3bn from its

inaugural Euro denominated bond issue, w hich w as split into a

EUR 1bn eight year tranche w ith a coupon rate of 0.75% and a

EUR 2bn 20 year tranche of 2% coupon rate.

Total value of sovereign bonds issued in Q3 2019 by the Emirate of Abu Dhabi.

The Emirate of Abu Dhabi issued USD

3bn in f ive-year bonds w ith a coupon rate

of 2.1%, USD 3bn in 10 year bonds w ith

a coupon rate of 2.5% and USD 4bn in 30

year notes w ith a coupon rate of 3.1%.

Total value of corporate bond issued by DP World Crescent Limited in Q3 2019.

DP World Crescent Limited issued USD

300m of conventional bonds as a tap

issuance on the USD 1 billion bond that

w as issued in September 2018. It also

issued USD 500m w orth of bonds on 30

September 2019 w ith a coupon rate of

4.7% and 30 year maturity.

Total value of sukuk issuance in Q3 2019 by DP World Crescent Limited on Nasdaq Dubai.

DP World Crescent Limited issued USD

1bn w orth of sukuk on Nasdaq Dubai on

18 July 2019 w ith a coupon rate of 3.9%

and USD 500m w orth of sukuk on 30

September 2019 w ith a coupon rate of

3.8%. Both w ill mature in 10 years.

USD 1.5bn

| GCC Capital Markets Watch Q3 2019 | PwC7

USD 10bn USD 800m

How PwC can help you

At Pw C, w e understand that good preparation is essential to a successful IPO and debt issuance. We have experience in a w ide range

of international, regional and domestic IPOs and debt issuances, and can provide expert guidance from initial planning, through to

execution and beyond.

IPO and debt preparation IPO and debt execution

Our IPO and debt Readiness Assessment is an early stage

diagnostic review of the critical areas needed for a successful

issuance. We highlight w here current processes, procedures,

structures and practices fall short of the requirements for a

company w hose securities are to be publicly traded and

provide recommendations on how to address these gaps.

We w ork w ith issuers and their advisors to provide IPO and

debt advisory and assurance services. This may include

w orking capital reporting, f inancial due diligence, f inancial

positions and prospects procedures assessment, assistance

w ith MD&A drafting in relation to a prospectus, comfort letters

and project management.

This content is f or general inf ormation purposes only , and should not be used as a substitute f or consultation with prof essional adv isors.

© 2019 PwC. All rights reserv ed. PwC ref ers to the PwC network and/or one or more of its member f irms, each of which is a separate legal entity . Please see

www.pwc.com/structure f or f urther details.

190317-165245-PB-OS

About PwC’s GCC Capital Markets Watch

GCC Capital Markets Watch surveys IPOs on GCC’s principal stock exchanges and market segments as w ell as conventional bond

and sukuk issuances on a quarterly basis. This survey w as conducted betw een 1 July 2019 and 30 September 2019 and captures

the relevant data based on their transaction date. GCC Capital Markets Watch is prepared by Pw C Middle East (w ww.pwc.com/me).

All market data is sourced from publicly available information and has not been independently verif ied by Pw C.

Steve Drake

Partner, PwC Capital Markets,

Middle East

Direct: +971 (0) 4304 3421

Mobile: +971 (0) 5045 14661

Email: s.drake@pw c.com

Muhammad Hassan

Partner, PwC Capital Markets,

Middle East

Direct: +971 (0) 4304 3443

Mobile: +971 (0) 5017 42472

Email: muhammad.hassan@pw c.com

Sergiu Gherasim

Partner, PwC Capital Markets,

KSA

Direct: +966 (11) 2110 400

Mobile: +971 (0) 5641 76719

Email: sergiu.gherasim@pw c.com

Contacts