MENA IPO market stays in limbo as structural headwinds overtake geopolitics as the bigger drag

Geopolitics, make way for structural headwinds: A little over two months after a US-Iran truce shaved off the region’s immediate risk premium, the regional IPO market is still in somewhat of a limbo with prospective issuers taking one and two steps forward before retreating into an ever-inflating pipeline. The consensus is that structural headwinds — like tighter liquidity, more expensive funding, and tougher valuation discipline — have now overtaken geopolitics as the bigger obstacle.

REFRESHER- The region closed 1Q 2026 with just four IPOs raising a combined USD 296.6 mn — the weakest first quarter since 2018. The ceasefire had made markets attractive again, analysts told us, but the structural rot ran deeper than geopolitics: Thinner liquidity, a valuation recalibration, and a string of 2025 listings that never delivered meaningful secondary-market returns had already killed the region’s IPO euphoria before the first shot was fired.

The pundits’ read hasn’t changed much since then: “The developments since April largely reinforce our view that the IPO market remains highly selective rather than broadly reopened,” Tahir Abbas, head of research at Ubhar Capital in Oman, tells EnterpriseAM, adding that fundamentally strong companies offering attractive valuations are among the best placed to make it onto the trading floor at times like this.

The 2Q scorecard: Saudi contractor Mutlaq Al Ghowairi (MGC) yanked its USD 800 mn Tadawul offering despite institutional orders exceeding supply. Egypt’s Banque du Caire pushed its long-anticipated listing to the fall citing the summer market lull, with Qalaa Holding’s National Ports Management following suit. The UAE’s Al Habtoor shelved its DFM plans entirely, with Emirates Global Aluminium (EGA) also holding off its market debut until next year at the earliest, after one of its smelters suffered severe damage during the conflict.

It’s not all doom and gloom, some (small-ish) names made it to the finish line: Dar El Balad — small-cap Saudi IT services firm — surged 28.21% on its Tadawul debut in May, with its institutional book 66.6x oversubscribed making it the first GCC listing since the Iran war broke out and a closely watched litmus test for regional sentiment. Egypt’s Korra Energi followed in June, closing up 19.5% on its EGX debut with EGP 977.9 mn in first-day turnover, making it the bourse’s second IPO of the year, and the first since the war began.

Breaking through the noise is Oman’s Omifco, which just priced its upcoming IPO after closing an oversubscribed bookbuilding process ahead of plans to hit the Muscat Exchange next week. (We have more on the offering in this morning’s Markets + Deals column, below). Meanwhile, Qatar’s Dandy has priced its offering at QAR 1.37-1.42 per share, targeting QAR 214 mn in total proceeds.

What’s nailing the window shut

The IPO slowdown predates the war…: Gulf equity markets were already under pressure from falling oil prices, stretched valuations, declining dividend yields, and a shift of flows toward US and AI-driven markets, Muhammad Ahsan, Bank Nizwa’s senior head of treasury & global markets and investment banking, tells EnterpriseAM. “Poor post-IPO performance of some companies made the IPO case difficult. War brought this to a halt, but we had already seen a slowing trend,” he added.

…but issuers now have to exercise more caution: In addition to grappling with geopolitical risks and the growing weight of structural factors, companies looking to go public also need to consider “more disciplined valuation expectations” from investors, Abbas says. These factors have become the primary determinants of IPO execution, requiring issuers to be more realistic on pricing and timing of the issue,” he added.

The market is paying more attention to post-listing performance than oversubscribed order books, Junaid Ansari, director of investment strategy and research at Kamco Invest, tells EnterpriseAM. “With current market performance limited by geopolitical issues, IPO contenders are worried that post-listing performance may not live up to investor expectations,” he says. Abbas echoes that view, arguing that “while investor appetite for quality issuers still exists, covered books alone are no longer sufficient to guarantee successful execution. Valuation expectations, aftermarket performance considerations, and issuer flexibility have become equally important.”

The clustering risk is real: “Deal sequencing has generally remained disciplined, with advisors and issuers showing greater willingness to postpone transactions rather than force execution into suboptimal market conditions,” Abbas says. The risk, he warns, is that the growing backlog increases clustering pressure once sentiment does shift, this is why the careful coordination of issuance calendars matters.

Foreign capital isn’t exactly rushing back: The geopolitical backdrop may have improved, but Abbas says it has not been enough to trigger “a meaningful return of big foreign participation.” Instead, global interest rates and the broader macro outlook remain the bigger swing factors, leaving international investors highly selective and focused on quality issuers with compelling valuations.

That caution is also showing up in pricing. GCC equities continue to trade at a discount to broader emerging markets, Ansari notes, a valuation gap that is still weighing on demand from international investors.

The comeback

The revival will be spearheaded by governments offloading stakes in well-known, established names — essentially following the Omifco model, Ahsan argues. “Private sector firms will not be too keen to come for an IPO in this environment, at least for the next few months,” he tells us. The bar for a privately-owned issuer to go to market in this climate — pricing realistically, building a book with skittish institutional investors, then holding up in secondary trading — is simply too high for most IPO-hopefuls to clear.

The hottest listing venue? Saudi Arabia retains its structural edge despite MGC’s withdrawal, Abbas argues. One pulled listing, even one as closely watched as a USD 800 mn infrastructure offering with a covered book, doesn’t alter the kingdom’s position as the region’s deepest institutional market. “Every market experiences transaction-specific outcomes,” he tells us, and Saudi’s fundamentals as an IPO destination haven’t changed: The domestic institutional base is the largest in the region, government-linked flows remain active, and the pipeline is deeper than anywhere else in the Gulf.

Oman, meanwhile, continues to benefit from a supportive privatization program, Omifco being the most recent proof point. The UAE stays in the middle because higher exposure to international sentiment makes execution harder to read. Kuwait and Egypt face comparatively greater challenges: Shallow liquidity in the former, and macro stress in the latter.

Pundits remain cautious on the outlook

“Our base case is for a gradual recovery in IPO activity during the remainder of 2026, led by high-quality government-linked entities and companies with strong earnings visibility, while private-sector issuers remain selective. We expect issuance volumes to improve but remain below the peak levels seen in recent years,” Abbas says.

“The downside scenario would involve a resurgence in geopolitical tensions, prolonged elevated interest rates, or a deterioration in global risk sentiment, which could further delay IPO activity and keep execution windows narrow,” Abbas added.

Near-term complications sit on the horizon: Minor skirmishes could spill into July and continue to weigh on markets, Ansari says, making issuers more likely to delay or cancel plans while waiting for better valuations. He warns that forthcoming 2Q corporate results could reset expectations further if the conflict's impact on fundamentals runs deeper than the market is pricing. On top of that, liquidity is set to face a seasonal 3Q slowdown, he adds, with cyclicals unlikely to recover before year-end at the earliest.

Ahsan is the most cautious of the three, expecting only a tepid recovery in 2H at best, with the Saudi market leading, and little to nothing expected from the UAE and Qatar. “I believe stability in regional geopolitics could drive more issues, but in 2027,” he tells us.