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How do you see the opportunity in your obstacles? MENA IPO Eye: Q1 2021 ey.com Contents

MENA IPO market 04 GCC market highlights 11

Non-GCC market 15 Global IPO market 17 highlights

Appendix 27

About this report EY MENA IPO Eye report is released every quarter and looks at the IPO markets, trends and outlook for the MENA region. The current report provides insights, facts and figures on the MENA IPO market during Q1 2021. You will find this report at the EY IPO website and you can subscribe to receive it every quarter. All values are US$, unless otherwise noted.

Subscribe to MENA IPO Eye reports Get the latest MENA IPO analysis direct to your inbox. MENA IPO market “The MENA region’s IPO market was off to a slower than expected start in First quarter IPO market 2021, despite expectations for an increase in IPO activity after an uptick and stronger performance in Q4 of 2020, with total proceeds down by 64% in Q1 demonstrating strong investor 2021 when compared to the same period last year. The three IPOs during this quarter, which raised a total of US$295m in proceeds, demonstrated strong demand, with a positive outlook investor demand in the market, particularly in KSA — hence we expect IPO activity to bounce back over the coming months while economic conditions in on increased activity in the the region continue to improve, aided by the accelerated vaccine rollouts and coming quarters, despite a the possibility of reaching herd immunity.” slower-than-expected start. Matthew Benson EY MENA Strategy and Transactions Leader

MENA IPO Eye: Q1 2021 | Page 3 MENA IPO market 1 MENA IPO market summary: off to a slower start than prior year, hampered by continued uncertainty from the COVID-19 global pandemic

Key highlights MENA IPO overview • MENA IPO markets saw three IPOs during the first quarter of 2021, with total proceeds of US$294.8m, down by 64% compared with the first quarter of 2020. These listings were in Change quarter- Top listing venue the transport, power and utilities, and real estate sectors. Q1 2021 over-quarter (QoQ) Q1 2021 • The Saudi Exchange () was MENA’s top listing venue for Q1 with two listings totaling US$281.6m, which represented 96% of the total amount raised by MENA IPO candidates in Q1 2021. (Tadawul) • The IPO market in MENA was off to a slow start in 2021, despite expectations for an -25% increase in activity after an uptick in issuances in Q4 of 2020 with four IPOs and US$925m 3 2 IPOs raised in proceeds. Continued uncertainty around the impact of the ongoing pandemic has IPOs IPOs affected the MENA markets even as oil prices have continued their recovery and vaccination roll outs have been gaining speed across the region. US$295m -64% US$282m • The first IPO of the year was REIT Fund which raised US$13.2m and got listed on the proceeds Proceeds proceeds Muscat (MSX). Although 261,943,500 units were offered to the market, only 49,943,500 units were eventually subscribed to. Note: Change QoQ reflects Q1 2020 vs. Q1 2021 • The first listing on the Tadawul for 2021, Alkhorayef Water & Power Technologies, raised US$144m by floating 30% of its shares. The offering was heavily oversubscribed, with the retail offering being oversubscribed by 1,511% and the institutional offering by 6,320%. MENA IPO activity • Theeb Rent a Car Company became the second company to list an IPO on Tadawul during Q1 2021, by offering 30% of its shares to the public and raising US$138m. Strong investor 900 5 demand led to an oversubscription of 6,010% for the institutional tranche and 3,385% for 800 the retail offering. 700 4 • Other listings for Q1 2021 included the direct listing of Foodco National Foodstuff P.J.S.C., 600 4 3 which listed 280 million shares with a nominal value of AED1 per share, on the ADX Second 500 Market, under the trading symbol FNF. In , Watani Iron Steel Company 400 814 3

US$m 2 completed their direct listing on Nomu on 17 February 2021, after having received the 300 approval from the Capital Market Authority (CMA) at the end of 2020. 200 IPOs of No. 295 1 100 0 0 Q1 20 Q1 21

Proceeds, US$m Axis Title Number of IPOs

Source: Refinitiv Eikon, S&P Capital IQ.

MENA IPO Eye: Q1 2021 | Page 5 MENA IPO market summary

MENA IPO activity (Q1 2018–Q1 2021)

30,500 9 10 9 7 8 2,500 6 6 6 7 6 2,000 4 4 4 5 30,170

US$m 2,665

1,500 3 4 No. of IPOs of No. 1,000 2 3 329 2 26 1,031 1 1 500 762 830 603 546 190 Nil 282 1 347 158 190 0 63 58 53 116 95 13 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Number of IPOs Capital raised (US$m) REIT value raised (US$m)

GCC IPOs Non-GCC IPOs

30 1 900 6 1 801 1 800 5 5 25 1 700 603 20 1 600 4 500 3 3

3 15 1 US$m 400 US$m

295 IPO of No. Axis TitleAxis 10 0 300 2 IPOs of No. 1 200 5 0 1 0 100 58 26 0 13 0 0 0 0 0 Q1 18 Q1 19 Q1 20 Q1 21 Q1 18 Q1 19 Q1 20 Q1 21 Proceeds US$m Number of IPOs Proceeds US$m Axis Title Number of IPOs

Notes: IPOs, including REIT listings, have been considered in each quarter, based on the subscription closing date. Source: Refinitiv Eikon, S&P Capital IQ.

MENA IPO Eye: Q1 2021 | Page 6 MENA equity markets: positive performances across most MENA markets

Key highlights MENA exchanges key data • MENA equity markets during Q1 2021 saw some strong performances, such as in Abu Dhabi where the was up by 17.2% as well as on the Tadawul with the index having gained 14% Q1 2021 Exchange during the first quarter. Other markets such as Egypt, and Qatar had negative Index Selected MENA indices index market cap returns for Q1, while ’s Premier Market and the Muscat Stock Exchange (formerly PE ratio* MSM) ended the first quarter of the year in positive territory. return (US$b)

• On the Tadawul, both IPOs of Q1 reached the maximum price fluctuation limit on listing day MSCI Emerging Markets (EM) Index 1.9% 21.5 with a price increase of 30%. The Tadawul had changed this limit from 10% to 30% late last year and both IPOs reached the new limits that have been set, showing a sign of IPO “pops” in Saudi Arabia, which are relatively uncommon for the MENA region. This strong Tadawul All Share Index (TASI) 14.0% 2568.5 25.5 performance continued with both Alkhorayef and Theeb shares trading up by 43% and 40%, respectively, for Q1 from the date of listing. General Index –0.4% 166.4 18.5 • The Oman REIT Fund saw a negative return of 3% on its listing day, with the fund price down 6% for the quarter as compared with its IPO price. Abu Dhabi Securities Market General Index 17.2% 236.3 17.2

MENA IPO pricing and performance General Index (DFMGI) 2.3% 97.1 12.5 Alkhorayef Water & Power First-day return Share price performance Q1 2021 Technologies +30%^ Listing date: 3/1/2021 Tadawul +43% Bahrain All Share Index (BSEX) –2.2% 24.1 9.1 Power and utilities

Theeb Rent a Car Company First-day return Share price performance Q1 2021 EGX 30 Index –2.5% 44.4 8.9 Listing date: 3/29/2021 +30%^ +40% Transport Tadawul Premier Market Index 5.0% 84.9 25.4 Oman REIT Fund First-day return Share price performance Q1 2021 Listing date: 2/28/2021 –3% Muscat Stock –6% REIT Exchange MSM General Index 1.3% 28.5 9.4

Notes: 1) + or — indicates change compared with offer price at IPO. 2) Share price performance measured by IPO price — 31 March 2021 (exception: ^ indicates maximum daily price fluctuation limit was reached). All data 31 March 2021 *The price-earnings (PE) ratio of the index as calculated by Refinitiv and based on trailing PE ratio. Source: Refinitiv Eikon, S&P Capital IQ, stock exchange disclosures.

MENA IPO Eye: Q1 2021 | Page 7 MENA markets and oil price performance: increased oil prices bode well for producers in MENA economies

MENA exchanges' performance In the first quarter, oil market balance continued to tilt toward an 20% inventory draw. Demand crept up, OPEC and oil producers outside of North America increased output 10% while the capital constrained North American producers reduced output. 0% Going forward, we can expect

continued gradual growth in Market return Market

demand and supply. Over time, as (percentage change) (percentage -10% inventories draw down to where Jan 21 Feb 21 Mar 21 Apr 21 they were before the pandemic, Abu Dhabi Securities Exchange General Index Bahrain All Share Index producers will coordinate supply DFM General Index Qatar Exchange General Index expansion at rates slightly higher Tadawul All Share Index EGX 30 Index than demand recovery until the Source: Refinitiv Eikon MSM General Index Boursa Kuwait Premier Market Index market is balanced in real time. Brent futures have increased in the OPEC and Brent oil price short term given global COVID-19 vaccination programs coupled with 75 the continued supply discipline of the OPEC+. 65 Going forward, there will be continued scrutiny on global

barrel) 55 vaccine distribution, changes in mobility patterns, decarbonization Oil prices (US$ per per (US$ prices Oil 45 and actions by OPEC+ that will Jan 2021 Feb 2021 Mar 2021 Apr 21 continue to impact medium-to-long- term oil demand.

OPEC price Europe Brent crude Source: EY Price Point: global oil and gas market outlook Q2 | April 2021

Notes: Updated as on 31 March 2021. Source: Organization of the Petroleum Exporting Countries (OPEC) and Energy Information Association (EIA).

MENA IPO Eye: Q1 2021 | Page 8 As we look toward 2021 and beyond, there are many reasons to be MENA IPO market outlook optimistic“ about the upcoming quarters ahead. A strong IPO pipeline in key MENA markets across sectors, coupled with various government Strong IPO pipeline in key initiatives to deepen the capital markets, particularly in KSA and the UAE, should help bring more IPOs to markets in the region. MENA markets, coupled with Additionally, the underlying economic factors within the region remain strong and we anticipate that future IPO activity in the MENA region various government initiatives will reflect the overall positive signs that we are beginning to see. and economic factors likely to Gregory Hughes bring more IPOs to markets in EY MENA IPO and Transaction Diligence Leader the region.

MENA IPO Eye: Q1 2021 | Page 9 Recommendations for IPO candidates: being well prepared is key

Implications for IPO candidates There are a variety of market factors that may impact investor sentiment for IPOs. Pre-IPO companies should analyze how these factors may affect their business, timing and valuations. IPO candidates looking to go public will need to be well prepared. They will need to: • Demonstrate business resilience with innovative business models, supply chain agility, financial strength and the ability to excel with the COVID-19 pandemic in the short to medium term • Be realistic about valuation levels COVID-19 • Have the right equity story; conduct extensive pre-marketing and pre-IPO funding to lower pandemic transaction risk, and improve pricing leverage with investors; and conduct virtual and shorter roadshows to limit market risk • Consider the geopolitical risk and changing regulatory environment Liquidity Regulatory • Emphasize environment, social and governance (ESG), and diversity on company boards and and market changes management teams volatility • Consider all options, from an alternative IPO process (e.g., direct listing, merger with special purpose acquisition company (SPAC)) to an alternative financing method (e.g., private capital, debt or trade sale) Geopolitical developments

Recovery of Inflation and underlying interest rates economic activities

MENA IPO Eye: Q1 2021 | Page 10 GCC market highlights 2 GCC market highlights: central banks and stock exchanges making efforts to support listings and confidence in capital markets

Saudi Arabia Qatar • Tadawul and the Securities Depository Center Company (Edaa) announced enhancements to • The Qatar Stock Exchange (QSE) announced the launch of the QE Venture Market (QEVM), the regulations of securities borrowing and lending (SBL) and short selling, following the which will provide a listing and trading venue for small and medium-sized enterprises (SMEs) CMA’s approval. The enhancements to the short selling framework include a provision that that do not fulfil the listing requirements of the main market. total net short positions must not exceed 10% of the free floated securities of the relevant • The launch of the new market is the result of the strategic initiatives and efforts made by the security and Tadawul will publish, on its website, a daily report for total net short positions QSE over the past years to develop Qatar’s capital market through continuous consultations after the trading session. with private and family owned companies to identify their needs, and offer them suitable • Tadawul’s own IPO continues to gain traction as the exchange announced its conversion into solutions and incentives for listing in the market, according to the Director of the QSE’s a holding company with four subsidiaries as a preparation for its IPO. The exchange is said to Listing department, Mr. Abdulaziz Nasser Al-Emadi. be in the process of selecting its advisors for the transaction, with the IPO expected later this Kuwait year. Tadawul is fully owned by Saudi Arabia’s sovereign wealth fund, the Public Investment • The Kuwaiti Cabinet approved a bill to secure guarantees for local banks to extend loans to Fund (PIF). businesses that have been affected by the pandemic. • According to S&P Global Ratings, Saudi Arabia’s economy is forecasted to return to positive • The cabinet further tasked a number of entities such as the Kuwait Investment Authority and growth this year, with the fiscal deficit expected to narrow due to the strengthening of the the , to propose bills and executive measures to back SMEs and to global economy and higher oil prices. mitigate the impact of the pandemic on these businesses. UAE Oman • At the beginning of 2021, the Abu Dhabi Securities Exchange (ADX) announced its new • The (MSM) has been converted into a closed joint stock company “ADX One” strategy, which aims to double over the next three years, and rebranded as the Muscat Stock Exchange (MSX). increase market liquidity and further improve market efficiency. The “ADX One” strategy • It has been put under the ownership of the state-owned Oman Investment Authority, which includes initiatives to launch derivatives trading, an investor relations guide and a program was established last year after merging the State General Reserve Fund (SGRF) and the Oman to support research coverage of . Investment Fund (OIF), to own and manage most of the country’s sovereign wealth fund and • Sustainable Finance Working Group, launched in 2019 with 12 members, published two finance ministry assets. comprehensive guides as part of Dubai’s efforts to accelerate its leading position and expansion of environmental, social and governance (ESG) and sustainable finance in the UAE Bahrain and wider region. The Sustainable Investing Guide, which was launched at the Dubai • announced its plans to adopt the Global Industry Classification Standard Sustainable Finance Webinar, highlights the increasing ESG opportunities for investors as (GICS) for listed companies effective 11 July 2021, in line with its strategy to enhance companies and the financial markets pivot toward integrating sustainability into their transparency and efficiency in Bahrain’s capital market and to meet best international mainstream activities. practices. • The Central Bank of the UAE (CBUAE) expects economic activity in the UAE to continue its • Bahrain Bourse plans to conduct various awareness sessions and workshops for the public to recovery with the gross domestic product (GDP) growth forecast to recover to positive raise awareness on this initiative. The current sectorial indices will no longer be calculated growth of 2.5% during 2021. The CBUAE further expects a full recovery in 2022, with with historical values continuing to be accessible on Bahrain Bourse’s website. overall real GDP increasing by 3.5%, while the non-oil real GDP is forecast to rise by 3.9%.

Source: Refinitiv Eikon, S&P Capital IQ, Bloomberg, Zawya, Press.

MENA IPO Eye: Q1 2021 | Page 12 UAE: law update

Key takeaways from Dubai Decree No. 3 of 2021 Requiring PJSC companies profits or revenues are generated from business activities in Dubai, or ii) if 50% of the non-local to list on Dubai securities exchanges company’s total assets are located in Dubai. Non-local companies meeting either of these thresholds must list their shares on a local market in compliance with the listing requirements His Highness, Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai, made an of the local market. The mandatory listing must be completed by 25 January 2022, subject to announcement on 26 January 2021 affecting public joint stock companies (PJSCs) established any extension by the Dubai Economy or the relevant free zone authority in Dubai. Non-local or operating in Dubai and foreign companies that have a presence in Dubai, including those companies that do not satisfy the conditions may still list on a local market, subject to the operating in one of the many free zones in Dubai. His Highness issued Decree No. 3 of 2021 on regulations of the local market. the listing of shares of joint stock companies on stock exchanges in the Emirate of Dubai (the Decree). What is the impact of the Decree on foreign companies? The Decree requires that all PJSCs incorporated in mainland Dubai or in a Dubai free zone, such • PJSCs that conduct business or have assets in Dubai but are incorporated and licensed as the Dubai International Financial Centre (DIFC), must list their shares on a securities overseas have no obligation to list on the local markets. However, they may elect to list their exchange in Dubai, namely the or Dubai (together, the local shares on a local market as a primary or secondary listing, if they satisfy the requirements of markets) by 25 January 2022. Licensed private joint stock companies have the to go the selected local market. public in local markets as long as they are compliant with listing requirements and regulations. This does not preclude such companies from listing their shares on another stock exchange as a Who is responsible for ensuring compliance? secondary listing. • Licensing authorities such as the Dubai Economy and those supervising free zones and This new Decree applies to and impacts three different types of companies in Dubai: special development zones, including the DIFC, are responsible for ensuring that local and • A PJSC established in Dubai (local companies) non-local companies are compliant with the Decree. Those that are not, can be subject to • A PJSC established outside of Dubai in another Emirate in the UAE with branches, assets or de-registration and revocation of their license until they update their status. performing activities in Dubai (non-local companies) Other amendments • Foreign companies that have branches carrying out business activities in Dubai or which Female representation on board of UAE listed companies hold assets in Dubai (foreign companies) What is the impact of the Decree on local companies? • The Security and Authority (SCA) recently announced that all companies listed on any of the UAE securities exchanges are now required to have at least one female • All local companies must list their shares on local markets by 25 January 2022, subject to director on their boards (New Resolution). satisfying the listing requirements of the chosen local market. Local companies may not list • This requirement came into force on 14 March 2021. While the New Resolution has not yet on any securities exchange outside the Emirate of Dubai without first listing on a local been published, it is expected to replace the previous rule issued by the SCA under Board market. The Decree will have limited impact on local companies as most are already listed on Resolution No. (03/R.M) of 2020, which adopts the Corporate Governance Guide for PJSCs a local market. However, any future local companies must first list on a local market before seeking to list on another market in the UAE or elsewhere. and came into force on 28 April 2020 (Corporate Governance Guide). The Corporate Governance Guide required PJSCs to have at least 20% female representation on their What is the impact of the Decree on non-local companies? boards. Companies were previously required to disclose the reasons behind any failure to • Non-local companies established in other emirates that conduct a substantial amount of achieve 20% female representation on the Board to SCA. However, with the New Resolution, business in Dubai must list their shares on the local markets. The benchmarks for substantial companies are now obligated to appoint at least one female director and they can no longer amounts of business are i) if 50% or more of a non-local company’s annual just provide a justification annually.

MENA IPO Eye: Q1 2021 | Page 13 Saudi Arabia: law update

Market manipulation and the CMA Market Conduct Regulations Amendments to Tadawul’s Listing Rules and the Glossary of Defined Terms Saudi Arabia’s CMA issued a resolution on 25 January 2021 to approve the amended CMA Used under the Exchange Rules Market Conduct Regulations (MCR). A draft of the amendments was published in late 2020 by Saudi Stock Exchange, Tadawul, announced on 9 March 2021 that the CMA’s Board has issued the CMA on their website for 30 days for public consultations. The CMA also held a workshop Resolution Number 1-22-2021, dated 24 February 2021, approving the following with discussing the amendments with capital market institutions. The CMA received comments and immediate effect: suggestions from both instances that were taken onboard in revising the MCR. • The amended Listing Rules for Tadawul (Listing Rules) • One of the main amendments to the MCR is on the prohibition of market manipulation. As • The amended Glossary of Defined Terms Used in the Exchange Rules (Glossary) per Article 2 (b) of the MCR, entering an order or executing a trade in a security to create a false or misleading impression of trading activity or interest in the purchase or sale of a The updated Listing Rules include provisions regarding the conditions of listing of investment security is not allowed. Similarly, entering an order or executing a trade to generate an fund units on Nomu–Parallel Market. Changes have also been made to the form of disclosures artificial bid price, ask price or trade price for the security is also prohibited. on the main market of Tadawul. • Another area the amendments developed in the MCR is regarding the issue of insider The Glossary adds the new term “Capital Market Institution” which means a person who is trading and disclosure of inside information. For example, directors, senior executives, or authorized by the CMA to carry out businesses relating to investment and trading, as set out in employees of a capital market institution are considered insiders and are prohibited from the Capital Market Law. The definition for “authorized person” has also been amended in the engaging in insider trading. Glossary to refer to Capital Market Institution. Following a recent violation of Article 49 of the Capital Market Law and Article 2 of the MCR, the CMA announced on 4 March 2021, the issuance of a board resolution regarding the referral of a suspicion of the violation to the public prosecution. Some investors were involved in manipulation and fraud practices in market trades, and the names of the violating parties were announced publicly by the General Secretariat of Committees for Resolution of Securities Disputes on its website. Anyone affected by these violations can file a complaint to the CMA and they can then file a compensation claim against the violators before the Committee for the Resolution of Securities Disputes. This quick reaction by CMA is encouraging to investors and evident that manipulations will not be taken lightly.

Alison Hubbard Franco Grilli Sarah Hasnani Partner — EY Law LLP Partner — EY Law LLP Manager — EY Law LLP EY MENA Law Leader EY MENA Law Financial Services Leader [email protected] [email protected] [email protected]

MENA IPO Eye: Q1 2021 | Page 14 Non-GCC market highlights 3 Non-GCC market highlights: IPO pipeline in Egypt continues to increase

Key highlights: Egypt • The (EGX) received approval from the Financial Regulatory Authority (FRA) on its proposal to allow youth from 16 to 21 to acquire investor codes and to invest on the EGX without needing to obtain their guardian’s approval. In this case, the brokerage firm undertakes to comply with the regulations of the FRA’s Decision No. 23 for year 2021, regarding the investment of youth. The EGX states that this step allows youth to invest and save through EGX, promoting the culture of savings and investment through the Egyptian Capital Market, and accordingly achieve strong growth rates in a sustainable manner. This will also increase investors’ base for the benefit of the market liquidity, listed companies and investors. The EGX also announced additional financial literacy activities, having signed cooperation agreements with three universities and the National Training Academy, to further introduce the role of the Egyptian Capital Market in supporting economic growth as well as the basics of saving and investment through the . • The FRA established a Regional Center for Sustainable Finance, a new center which will focus on strengthening the Egyptian economy’s existence on the global green economy map as the Middle East and Africa (MEA) region’s first sustainable finance center. • New initiatives were further announced by the FRA in agreement with the Central Bank of Egypt to establish a fund to finance financial brokerage companies, in order to increase the volume of liquidity on the EGX. This fund also aims to increase the solvency and financial capacity of current investors as well as increase the entry of new investors. • The pipeline for Egyptian listings continues to look promising for Q2 as Taaleem Management Services was the first IPO candidate on the EGX for 2021, with the listing having occurred on Aril 7th and IDH having completed its dual listing on May 20th. Macro Group announced the postponement of its IPO which was scheduled for April 2021. Other potential IPO candidates for 2021 include e-finance, Banque Du Caire and Ebtikar Holding for Financial Investments. • According to the Egyptian Minister of Planning Hala Al-Saeed, economic growth in Egypt is forecast at 5.4% in the next fiscal year 2021–22 up from 3.3% expected in 2020–21.

Source: Refinitiv Eikon, S&P Capital IQ, Bloomberg, Zawya, Press.

MENA IPO Eye: Q1 2021 | Page 16 Global IPO market 4 Global IPO market “With markets awash with liquidity, global IPO deal numbers and proceeds have posted the best performance witnessed in the last 20 years. However, many Liquidity continues to fuel uncertainties remain that will create volatility and affect the IPO markets. These include slower-than-expected global IPO markets in Q1 2021 vaccination programs and new waves of the pandemic that continue to peg back any real economic recovery; the slow- down and withdrawal of IPO applications due to tightened regulatory process; and risk of capital markets destabilizing from banks scaling back on leverage. Companies need to be well prepared to access the market while the window remains open.

Paul Go EY Global IPO Leader

Page 18 Mutual Agreement Procedure (MAP) in Saudi Arabia Global IPO market summary: buoyant conditions likely to be tempered in the foreseeable future by a number of headwinds

Key highlights ► Other good news for investors is the healthy pipeline of unicorns that are set to make their way to public markets this year. We will also see more companies coming to the public markets ► Although the first quarter is typically slower, Q1 2021 has been the best-performing first in nontraditional ways, such as direct listings and, of course, SPAC mergers. quarter by deal numbers and proceeds in the last 20 years. This is before we include the SPAC IPOs, which in Q1 2021 alone have completed more deals and raised more proceeds ► Despite the robust IPO activity in Q1 2021, investor sentiment remains fragile. There is fear than the record-breaking full year of 2020. of a market correction on the horizon, with uncertainties over possible new waves of the pandemic stalling the economy recovery, the speediness of the vaccination program rollout ► This surge in momentum can be attributed to the ample liquidity in the financial systems; and the potential disruption to the financial system caused by banks scaling back on leverage the accelerated growth of technology and new economy companies propelled by the offered to the professional investors. pandemic; speculative and opportunistic transactions; and platforms that have made retail investing more accessible to the general public and young generations. ► Technology IPOs led again by both numbers and proceeds in Q1 2021, with big technology IPOs driving high valuations and getting a lion’s share of the IPO proceeds. Meanwhile, energy ► On the world stage, with Brexit more settled down, the UK and European IPO markets have IPOs are making a comeback as one of the better-performing sectors, particularly renewable come alive again, with , Frankfurt and posting some of the largest IPOs energy. in Q1 2021. Europe, in particular, has proven to be one of the bright spots that helped to propel the global IPO activity to its current heights.

Q1 2021 comparison

Global Americas Asia-Pacific EMEIA

Number Proceeds Number Proceeds Number Proceeds Number Proceeds ▲ 85% ▲ 271% ▲218% ▲ 446% ▲ 28% ▲105% ▲179% ▲646%

600 $150 150 121 $80 300 $60 150 $50 430 200 109 $60 $40 400 $100 100 200 156 $40 100

233 $30

US$b

US$b US$b $105.6 US$b 38 $40

200 $50 50 100 $16.7 $20 39 $20

No. of IPOs of No.

No. of IPOs of No. No. of IPOs of No. $45.2 IPOs of No. $34.3 50 $28.5 $20 $26.1 $8.3 $3.5 $10 0 $0 0 $0 0 $0 0 $0 Q1 20 Q1 21 Q1 20 Q1 21 Q1 20 Q1 21 Q1 20 Q1 21

Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b

All values are US$ unless otherwise noted. Q1 2021 and Q1 21 refer to the first quarter of 2021 and cover completed IPOs from 1 January 2021 to 24 March 2021 plus expected IPOs by the end of March 2021. Data as of closing of business (COB) 24 March 2021.

MENA IPO Eye: Q1 2021 | Page 19 Global IPO market outlook

► Despite a record-breaking first quarter in 2021, uncertainties will continue to weigh in and ► The direction of cross-border IPOs ahead will depend on the implementation and tone from the create market volatility. A new wave of the pandemic; speed of vaccination rollouts and efficacy Holding Foreign Companies Accountable Act (HFCAA) and other regulations from different rates; geopolitical tension; inflation and interest rates; and soundness of financial systems to jurisdictions. Currently, Chinese and European companies remain undeterred, although there is a withstand any unexpected market shocks are all ingredients that may trigger a perfect storm. steady flow of US-Chinese foreign private issuers (FPIs) looking to complete secondary listings

► Disappointing 2020 earnings released by companies in sectors that have been more outside of the US, and we expect this trend will continue. negatively impacted (e.g., traditional retail, aviation and hospitality) can further dampen ► SPAC IPOs remain largely a US phenomenon. However, with their exponential rise in popularity, investor sentiment as they face the prospect of another ”lost summer.” Amsterdam, Frankfurt, Hong Kong, Indonesia, London and Singapore exchanges are all exploring ► In response, investors may pause to review their portfolios and rebalance their investment opportunities to create more active SPAC markets. allocations among different asset classes. ► The SPAC growth reflects the sheer amount of liquidity available in the market, and liquidity ► In the meantime, investors will continue to look for investment returns and take advantage of that may not be so readily available in the market in two years’ time. The listed SPACs represent the liquidity and market sentiment, until they see better returns elsewhere or when they are a genuine viable option for private companies looking to raise capital. forced to liquidate their portfolios to meet any capital or margin calls, which could accelerate ► Listed SPACs have created investment demand and pushed up valuations on potential merger and turn into a vicious stock price adjustment cycle. targets in private businesses, private equity’s portfolio companies and start-ups. ► Technology and health care IPOs will continue to dominate in the short term. Investors ► Companies in the right sector, with the right story and that are well prepared, will want to catch remain receptive to companies in the right sectors: e-commerce, food delivery, online gaming, the open IPO window now. However, it’s important to look at all options, whether it is a traditional cloud solutions and other companies that have prospered during the pandemic. IPO, SPAC merger or direct listing.

IPO activity vs. MSCI World Index C 182 3,000 200 The global equity 161 166 2,727 2,767 2,583 2,662 index rose to new 133 2,456 116 122 150 113 104 2,342 165 heights during Q1 2,179 96 2,202 2,690 88 2,139 2,180 2,141 2,148 2021, while IPO 2,028 2,086 2,108 64 2,053 137 100 2,358 112 2,367 Nos Level 2,292 2,305 2,293 100 activity reached the 2,178 2,188 2,234 87 64 2,046 84 50 highest level in 20 45 51 61 64 43 47 73 1,853 45 40 1,500 0 years, demonstrating that equity markets

are resilient, open and

Jul 20 Jul Jul 19 Jul

Feb 20 Feb Feb 19 Feb 21 Feb

Oct 19 Oct 20 Oct

Apr 19 Apr 20 Apr

Sep 19 Sep Jan 19 Jan 20 Jan 20 Sep 21 Jan

Dec 19 Dec 20 Dec

Jun 19 Jun 20 Jun

Mar 19 Mar 20 Mar 21 Mar

Nov 19 Nov 20 Nov

Aug 19 Aug 20 Aug May 20 May May 19 May working. Level of MSCI Number of IPOs

*MSCI World Index is composed of more than 1,500 constituents listed on stock exchanges of various developed markets. The index includes companies from 24 developed markets in Australia, , , Canada, , , , , Greece, Hong Kong, Ireland, Israel, Italy, Japan, the , New Zealand, , Portugal, Singapore, Spain, , Switzerland, the UK and the US. The index constituents are weighted on the basis of free float market capitalization. MSCI World Index is reviewed on a quarterly basis and is managed by MSCI Inc. Number of IPOs shown in this chart excludes all deals with proceeds below US$5m and SPACs. All values are US$ unless otherwise noted. Q1 2021 and Q1 21 refer to the first quarter of 2021 and cover completed IPOs from 1 January 2021 to 24 March 2021 plus expected IPOs by the end of March 2021. Data as of closing of business (COB) 24 March 2021.

MENA IPO Eye: Q1 2021 | Page 20 Special purpose acquisition “The SPAC market continues to sizzle, with more SPAC IPOs in Q1 2021 than all of 2020. While SPACs have become considerably more mainstream, it is crucial that companies (SPACs) IPO market private companies carefully evaluate this path, prepare for rapid transformation and maintain flexibility to adjust insights course during the journey as alternatives and prevailing market conditions continue to evolve. Public company SPAC boom shows no signs of slowdown preparedness is a key ingredient for long-term success. Karim Anani EY Americas SPAC Leader

Page 21 Mutual Agreement Procedure (MAP) in Saudi Arabia SPAC highlights: more SPAC IPOs in Q1 2021 than all of 2020

► Q1 2021 global SPAC IPO activities already surpassed 2020’s record year totals. While the SPAC IPO activity US accounts for the bulk of activity, SPAC IPOs are starting to grow outside of the US. Q1 2021 ► Europe’s Q1 2021 deal numbers and proceeds already exceed full-year 2020 levels. Q1 2021 saw seven SPAC IPOs, raising a total of US$1.8b compared with six SPAC IPOs and Global United States Europe total proceeds of US$541m in 2020.

Q1 2021 Change on Q1 2020 Q1 2021 Change on Q1 2020 Q1 2021 Change on Q1 2020

▼ ► ▼ SPAC IPOs accounted for 8% of European exchanges’ IPO activity and 7% by proceeds in Q1 ▼ 2021. 307 21 times 300 23 times 7 7 times

IPOs IPOs IPOs

► Of the 653 SPACs that have completed IPOs between 2019 and the end of Q1 2021, 179

▼ SPACs have announced acquisitions with total acquisition value of US$53.7b by the end of ▼ US$95.2b 24 times US$93.4b 24 times US$1.8b ▲ 1,832 times March 2021. proceeds proceeds proceeds ► Announced SPAC acquisition activity globally is also growing at a fast pace, with the number of announced deals in Q1 2021 already at 81% of 2020 by deal number and 103% Global SPAC IPO activity of 2020 deal value. “The usual suspects” (technology, industrials and health care) were the most active sectors of announced SPAC acquisitions in Q1 2021. US companies were the $120 most active source of SPAC target companies in Q1 2021, followed by European and MENA 300 issuers. $60

150 US$b

Outlook Nos.

► Regulators for EU and UK exchanges have been looking at listing requirements surround 0 $0 SPACs. Some of the potential markets include , Deutsche Börse, NASDAQ OMX and 2017 2018 2019 2020 Q1 21 UK exchanges. Number of SPAC IPOs Proceeds US$b ► While in the Asia-Pacific, Hong Kong, Indonesia and Singapore stock exchanges are rumored to be exploring SPAC listings and are in initial consultation stages. European exchanges SPAC IPO activity

► The pace of future SPAC IPO and acquisition activity could be impacted by regulatory Number of SPAC IPOs SPAC IPO proceeds US$m changes, valuation levels of target companies and the availability of private investment in Stock exchange Q1 2021 2020 Q1 2021 2020 public equity (PIPE) financing to complete acquisitions, investor sentiments and stock-price London (Main and AIM) 3 4 363 46 performance of recently companies that came to the public markets via the de-SPAC Euronext (Amsterdam, ) 2 2 734 495 process. NASDAQ OMX (Stockholm) 1 0 403 0 Deutsche Börse 1 0 332 0 European exchanges 7 6 1,832 541

MENA IPO Eye: Q1 2021 | Page 22 SPAC highlights: more SPAC IPOs in Q1 2021 than all of 2020 (contd.)

SPAC acquisition activity Announced global SPAC acquisitions

$250

100

Nos. US$b 0 $0 2017 2018 2019 2020 Q1 2021

Number of announced SPAC acquisitions Total acquisition value US$b

Selected YTD 2021 announced SPAC acquisitions

Announcement month SPAC name Target Deal value US$b Target sector Target nationality

February Churchill Capital Corp. IV Lucid Motors Inc. 17.6 Industrials United States

March Thoma Bravo Advantage ironSource Ltd. 10.0 Technology Israel

March FinTech Acquisition Corp. V eToro Group Ltd. 9.8 Technology Israel

February Gores Holdings V Inc. Ardagh Metal Packaging SA 8.9 Materials

February Dragoneer Growth Opportunities Corp. CCC Information Services Group Inc. 6.7 Technology United States

All amounts in table are in US$ Source: EY analysis, Dealogic Figures may not total 100% due to rounding

*SPAC IPOs in this context refer also to ex-business development and blank check companies but exclude Capital Pool IPOs. SPAC IPO deal numbers and proceeds on this page are excluded from other parts of the Global IPO trends: Q1 2021 report (pages 1–11, 15–28 and appendices). All values are US$ unless otherwise noted. Q1 2021 and Q1 21 refer to the first quarter of 2021 and cover completed SPAC IPOs and traditional IPOs from 1 January 2021 to 24 March 2021 plus expected deals by the end of March 2021. Data as of COB 24 March 2021.

MENA IPO Eye: Q1 2021 | Page 23 EY has dedicated MENA IPO teams with experience in executing IPO services across key exchanges in MENA and other international regions.

Gregory Hughes How EY’s MENA IPO team can support you EY IPO services Partner — EY Consulting LLC, Dubai EY MENA IPO Leader IPO planning IPO execution Post-IPO IPO readinessdiagnostic [email protected] 1 Includes various follow-up services to help addressthe IPO readiness gaps identified

IPO preparation Mayur Pau • For any company considering an IPO on a MENA or Project management to help you better prepare Partner — EY Consulting LLC, Dubai international stock exchange, it is critical to map out the IPO (services include: support for business plan, IR EY MENA Financial Services IPO value journey. 2 strategy, HR, creation of KPIs, assistance with and Leader review of IPO valuation models and support for specific • As a first step to effective IPO planning, we recommend [email protected] IPO issues of tax accounting) undertaking an IPO readiness diagnostic to identify the key gaps across several areas of the business when compared IPO executionservices with the best practice and stock exchange requirements. Dependent on listing destination, including: financial Shana Marashi due diligence, working capital reports, feasibility • A key output of the IPO readiness diagnostic is a detailed road 3 studies,valuation services, financial positions and Manager — EY Consulting LLC, Dubai map of activities to address the identified gaps, actioned with prospects, MD&A section of prospectus drafting, EY MENA IPO Manager the assistance of EY professionals and other advisors. comfort lettersand project managementservices [email protected] • Effective IPO planning and execution will increase your chances of a successful IPO transaction, help improve your business, and save time and costs during the IPO journey.

MENA IPO Eye: Q1 2021 | Page 24 EY IPO resources

Guide to going public Download Strategic considerations before, during and post-IPO

Why the CFO is integral to a How market volatility is placing IPO How the easing of lockdowns has How private businesses are successful IPO activity at risk in 2020 impacted IPO activity reigniting growth Two CFOs share their learnings from the Turbulent market activity in the first quarter of Global IPO activity is beginning to increase, Responding to the COVID-19 crisis demands experience of taking a private company public. 2020 places major uncertainty on future buoyed by economies emerging from lockdown. agility — a key attribute of private businesses. listings.

MENA IPO Eye: Q1 2021 | Page 25 Is your business story ready for the public spotlight? As advisors to the ambitious, we support more companies that go public than any other Big Four organization.

#AmbitionUnlocked #IPOreport Appendix 5 Appendix

IPO activity per stock exchange Stock exchange IPO numbers

Stock exchange IPOs Q1 2021 IPOs since 2018

Tadawul — Main Market 2 22

Tadawul — Nomu 0 2

ADX 0 0

DFM 0 1

EGX 0 8

Boursa Kuwait 0 2

MSX 1 5

QSE 0 3

Casablanca SE 0 3

Source: Refinitiv Eikon, S&P Capital IQ.

MENA IPO Eye: Q1 2021 | Page 28 Appendix

List of MENA IPOs Q1 2018–Q1 2021

Size Quarter Issuer Sector Exchange (US$m)

Q1 2021 Theeb Rent a Car Company 137.6 Transport Tadawul

Q1 2021 Alkhorayef Water & Power Technologies 144.0 Power and utilities Tadawul

Q1 2021 Oman REIT Fund 13.2 REIT fund MSX

Q4 2020 BinDawood Holding 584.2 Consumer staples Tadawul

Q4 2020 Al Mal Capital REIT 95.3 REIT fund DFM

Q4 2020 QLM Insurance Company 179.6 Health care QSE

Q4 2020 Aradei Capital SA 65.9 Real estate Casablanca SE

Q3 2020 Amlak International for Real Estate Finance 115.9 Real estate Tadawul

Q1 2020 Dr. Sulaiman Al-Habib Medical Services Group Company 700.9 Health care Tadawul

Q1 2020 Aman REIF 52.5 REIT fund MSX

Tadawul Q1 2020 Sumou Real Estate Co. 47.8 Real estate (Nomu)

Q1 2020 Emerald Real Estate Investments 13.0 Real estate EGX

MENA IPO Eye: Q1 2021 | Page 29 Appendix

List of MENA IPOs Q1 2018–Q1 2021

Size Quarter Issuer Sector Exchange (US$m)

Q4 2019 Saudi Arabian Oil Company 29428.5 Oil and gas Tadawul

Q4 2019 Baladna Q.P.S.C. 395.6 Consumer products QSE

Q4 2019 Shamal Az-Zour Al-Oula Power and Water Company 181.0 Power and utilities Boursa Kuwait

Tenth of Ramadan for Pharmaceutical Industries and Diagnostic Reagents (Rameda) Q4 2019 108.7 Provider care EGX S.A.E.

Q4 2019 Boursa Kuwait 33.0 Banking and capital market Boursa Kuwait

Q4 2019 Musandam Power Company SAOG 23.1 Power and utilities MSX

Q3 2019 Fawry for Banking Technology and Electronic Payments S.A.E. 97.0 Technology EGX

Q3 2019 Ataa Educational Company 93.0 Professional services Tadawul

Q2 2019 Network International Holdings Limited 1400.0 Technology LSE

Q2 2019 Arabian Centres Company Limited 658.7 Real estate management and development Tadawul

Q2 2019 Finablr PLC 397.9 Technology LSE

Q2 2019 Maharah Human Resources Company 207.0 Professional services Tadawul

MENA IPO Eye: Q1 2021 | Page 30 Appendix

List of MENA IPOs Q1 2018–Q1 2021

Size Quarter Issuer Sector Exchange (US$m)

Q2 2019 Shuaa REIT Fund 157.7 REIT fund Tadawul

Q2 2019 Speed Medical Company 1.2 Health care EGX

Q1 2019 Al Moammar Information Systems Co. 57.6 Software and services Tadawul

Q4 2018 Qatar Aluminium Manufacturing Company Q.P.S.C. 758.7 Mining and metals QSE

Q4 2018 Sarwa Capital 123.0 Financial services EGX

Q4 2018 National Company for Learning & Education 65.9 Consumer services Tadawul

Q4 2018 Alkhabeer REIT 63.3 REIT fund Tadawul

Q4 2018 Mutandis SCA 42.5 Consumer goods Casablanca SE

Q4 2018 APM Terminals Bahrain B.S.C. 32.0 Transport Bahrain Bourse

Q4 2018 AOM Invest SpA 9.4 Leisure and tourism Algeria SE

Q3 2018 Leejam Sports Company 217.9 Consumer services Tadawul

Q3 2018 Cairo Investment & Real Estate Development Co 69.5 Real estate EGX

MENA IPO Eye: Q1 2021 | Page 31 Appendix

List of MENA IPOs Q1 2018–Q1 2021

Size Quarter Issuer Sector Exchange (US$m) Q3 2018 Dhofar Generating Company S.A.O.C. 52.0 Power and utilities MSX

Q3 2018 Tunisie Valeurs SA 7.9 Financial services Tunis SE

Q2 2018 Mefic REIT Fund 234.5 REIT fund Tadawul

Q2 2018 Shelf Drilling 225.0 Oil and gas SE (Norway)

Q2 2018 Bonyan REIT Fund 173.7 REIT fund Tadawul

Q2 2018 Swicorp Wabel REIT 94.4 REIT fund Tadawul

Q2 2018 CI Capital Holding Co SAE 57.8 Financial services EGX

Q2 2018 Immorente Invest S.A. 43.4 REIT fund Casablanca SE

Q2 2018 RA International Group Plc 24.6 Construction LSE (AIM)

Q2 2018 Arabia Falcon Insurance Co. 12.8 Insurance MSX Tadawul Q2 2018 National Building and Marketing Co. 8.6 Construction (Nomu) Q1 2018 BPE Holding For Financial Investments 26.3 Financial services EGX

Q1 2018 SEDCO Capital REIT Fund 173.3 REIT fund Tadawul

MENA IPO Eye: Q1 2021 | Page 32 Appendix

List of MENA IPOs Q1 2018–Q1 2021

Size Quarter Issuer Sector Exchange (US$m)

Q1 2018 Jadwa REIT Saudi Fund 126.4 REIT fund Tadawul

Q1 2018 Al Rajhi REIT Fund 113.8 REIT fund Tadawul

Q1 2018 Derayah REIT Fund 96.5 REIT fund Tadawul

Q1 2018 AlNefaie-Umm Alqura REIT Fund 93.2 REIT fund Tadawul

Source: Refinitiv Eikon, S&P Capital IQ.

MENA IPO Eye: Q1 2021 | Page 33 EY | Building a better working world Contacts EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets. Gregory Hughes Shana Marashi EY MENA IPO Leader EY MENA IPO Manager Enabled by data and technology, diverse EY teams in over Partner — EY Consulting LLC, Manager — EY Consulting LLC, Dubai Dubai 150 countries provide trust through assurance and help [email protected] [email protected] clients grow, transform and operate.

Working across assurance, consulting, law, strategy, tax and Mayur Pau transactions, EY teams ask better questions to find new EY MENA Financial Services answers for the complex issues facing our world today. IPO Leader Partner — EY Consulting LLC, Dubai [email protected] EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights Subscribe to MENA IPO Eye reports individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information Get the latest MENA IPO analysis direct to your inbox. about our organization, please visit ey.com.

The MENA practice of EY has been operating in the region since 1923. For over 97 years, we have grown to over 7,500 people united across 21 offices and 16 countries, sharing the About this report same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who EY MENA IPO EYE report is released every quarter and looks at the IPO markets, contribute to our communities. We are proud of our accomplishments over the years, trends and outlook for the MENA region. reaffirming our position as the largest and most established professional services organization in the region. The current report provides insights, facts and figures on the MENA IPO market during 2020. You will find this report at the EY IPO website and you can subscribe to receive it every © 2021 EYGM Limited. quarter. All Rights Reserved.

EYG no. 004588-21Gbl All values are US$ unless otherwise noted.

ED None

This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice. ey.com