-Saudi companies have drawn $176 billion in orders for their initial public offerings, surpassing the previous record set by Saudi Aramco in 2019, and impacting the broader market, as reported by Bloomberg.

– Saudi Arabia is expected to dominate the IPO market in the Middle East and North Africa region in 2024, with 27 companies planning to list on the Kingdom’s main market, as per the Dubai International Financial Center (DIFC).

– The surge in demand for Saudi IPOs is driven by hedge fund managers, retail investors, and digital subscription channels, with many IPOs showing strong first-day performance and significant returns compared to European IPOs, reflecting the Kingdom’s efforts to diversify its stock exchange.

Saudi companies have attracted $176 billion in orders for their initial public offerings, driven by investors keen to capitalize on returns seen over the past two years.

Reports show that this surge in IPO demand has exceeded the record set by Saudi Aramco in 2019, impacting the broader market, Bloomberg said.

Marwan Haddad, lead portfolio manager for Middle East and North Africa equities at Azimut, observed a notable surge in demand and a rush to the market.`

Saudi Arabia is set to lead the IPO market in the Middle East and North Africa region in 2024, with 27 companies planning to list on the Kingdom’s main market, according to an analysis by the Dubai International Financial Center (DIFC).

A report by DIFC, in collaboration with the London Stock Exchange Group, highlights a promising IPO pipeline in the MENA region, as many companies postponed their listings from 2023 to early and mid-2024 in anticipation of better market conditions.

DIFC noted that Saudi Arabia would drive the IPO activity, with 27 companies expressing intent to list on the Saudi Exchange (Tadawul), alongside expected follow-on issuances from Aramco and Savola.

Haddad attributed the high demand to several factors, including an influx of hedge fund managers, significant interest from retail investors facilitated by up to 10 times leverage from banks, and the convenience of digital subscription channels.

He noted that the demand appears inflated as investors adapt to smaller allocations, causing frustration among both international and local investors due to reduced allocations. The strong performance of these IPOs further fuels the demand.

Bloomberg data shows that of the 61 companies that went public in the last two years, 17 reached the maximum allowed 30 percent increase on their first trading day.

More than half ended their debuts above the offer price, with an average return of 32 percent, compared to a 5.2 percent return for European IPOs raising at least $100 million over the same period.

The Kingdom’s initiative to diversify its stock exchange is another contributing factor.