EFG Hermes predicts new IPOs in education, health, consumer sectors on Tadawul

Mohamed Ebeid, Co-Chief Executive Officer of EFG Hermes

Mohamed Ebeid, Co-Chief Executive Officer of EFG Hermes, expects the Saudi Exchange (Tadawul) to witness a surge in the activity of initial public offerings (IPOs) in the coming period in the education, healthcare and consumer sectors, as they are among the top candidates for new listings in the market.

In an interview with Argaam on the sidelines of the 19th annual EFG Hermes' One-on-One Investor Conference in Dubai, Obaid added that investors are anxiously awaiting the timing of these IPOs, given the current market fluctuations and the need for more economic stability to allow for an accurate evaluation of the targeted companies.

He also pointed out a growing interest by foreign institutional investors in the Saudi market, driven by the high participation in IPOs.

The number of investment accounts has increased significantly, with investors managing between 30 to 40 accounts, compared to only one or two accounts previously, Obaid said.

The developments seen in the Kingdom’s financial sector over the past years have largely contributed to strengthening the position of local funds and their competitiveness compared to peers in the region, which was reflected in the volume of liquidity flowing into the market, according to the official.

Obaid also stated that EFG Hermes has completed a number of successful transactions over the past year, including IPOs and merger and acquisition (M&A) deals, most notably Aramco's secondary offering, as well as deals in the mid-cap companies segment ranging from $500 million to $1 billion.

Furthermore, a number of family businesses in the Kingdom are currently working on merging subsidiaries and preparing them for listing to leverage the progress witnessed by the regulatory infrastructure of the financial market, he added.

As for the impact of the recent US tariffs, Obaid said that these developments may lead to a global economic slowdown, which will be reflected in oil prices and consequently in the Gulf economies, which may lead to delaying some major projects depending on priorities.

He also highlighted that the timing of the group’s conference in Dubai was both a challenge and an opportunity for investors, as it provided an opportunity to communicate directly with companies and discuss the impact of the current situation on their future plans amid the uncertainty in the markets.

The conference is seeing a strong turnout, both in terms of the number of investors and companies, reflecting the depth and growing interest in the region's markets, he noted.

According to Argaam's data, Tadawul’s Main Market (TASI) witnessed five listings this year, namely Umm Al-Qura for Development and Construction Co., Almoosa Health, Nice One Beauty Digital Marketing Co., Derayah Financial Co. and Arabian Company for Agricultural and Industrial Investments (Entaj).