Another Gulf airline IPO on the cards

Another potential airline IPO in the region? Saudi budget carrier Flynas has confirmed plans for a listing on Tadawul this year, Asharq Business 23reported, citing statements by CEO Bandar Al Mohanna at the Airline Economics Growth Frontiers conference in Riyadh. Al Mohanna did not provide further details on the planned IPO which was first reported by Bloomberg late last year. 

Background: Flynas tapped in December Goldman Sachs, Morgan Stanley, and Saudi Fransi Capital for the IPO, according to Bloomberg. The low-cost airline was said to be considering an IPO since 2008, but its plans never materialized. The floated IPO plans in December came months after sources told Bloomberg that the Public Investment Fund (PIF) was involved in talks to buy a stake in Flynas from Prince Al Waleed Bin Talal’s Kingdom Holding — in which the PIF bought a 17% stake in 2022. Sources said at the time that a stake sale to the PIF could delay the airline’s IPO plans.

Saudi Arabia is making a big push in its aviation sector: Not only has the Kingdom made plans for a new airline — Riyadh Air — to compete with other major airlines in the Gulf, including Emirates, Qatar Airways and Etihad, but sovereign wealth fund Public Investment Fund (PIF) is reportedly in early talks to acquire national carrier Saudia as soon as next year in a bid to overhaul the airline and improve its efficiency and net income.

Could Etihad Airways come first? Speculation around whether or not Etihad Airways is planning an IPO went into overdrive when the ADQ-owned carrier said it’s boosting profitability in preparation for a potential IPO. The wealth fund reportedly held talks with banks for a potential offering that could be “as soon as this year,” with the specific timing and size of the offering still undecided.

MARKETS THIS MORNING-

Asian markets are solidly in the green this morning, with the Nikkei and Korea’s Kospi each up 2% or more after Wall Street posted a second day of gains yesterday, snapping its losing streak. Futures are in the green as far as the eye can see, pointing to a stronger opening in both major European markets and on Wall Street later today.

THE CLOSING BELL-

The DFM stayed flat yesterday on turnover of AED 329.1 mn. The index is up 2.6% YTD.

In the green: Islamic Arab Ins. Company (+4.9%), Commercial Bank of Dubai (+3.5%) and Taaleem Holdings (+3.3%).

In the red: National International Holding Company (-9.1%), Emirates NBD (-3.7%) and Ekttitab Holding Company (-2.9%).

Over on the ADX, the index closed down 0.3% on turnover of AED 974.9 mn. Meanwhile, Nasdaq Dubai fell 0.6%.

CORPORATE ACTIONS-

Al Ain Ahlia Ins. approved distributing AED 30 mn in dividends for 2023, amounting to AED 2 per share, according to an ADX disclosure (pdf).

Agthia Group will distribute AED 0.185 per share in dividends, as well as 5% bonus shares for 2023, an ADX disclosure reads (pdf). The decision brings total dividends for the year to AED 146.5 mn, after the company paid an interim dividend of AED 0.825 per share, totaling AED 65.31 mn for 1H 2023.