Iridium study finds that less than 1/3 of IPOs in the GCC succeed

Iridium study finds that less than 1/3 of IPOs in the GCC succeed

1. Underpricing: the difference between the IPO offer price and the first-day closing price

2. Stabilization period: the 30-day period of price stabilization post-listing

3. Excess return: the relative company share price versus a country index over time

“It is very encouraging to see government-owned and private companies embracing public equity markets in the GCC,” says Oliver Schutzmann, CEO of Iridium Advisors and a co-author of the report. “With a well-thought-out program of new public listings, which is already underway, the region has the opportunity to re-energize its capital markets and attract foreign capital to diversify economic growth. Nevertheless, there is still a big mountain to climb to unlock the true capital markets potential of listed companies for both issuers and investors.”

Companies planning a public listing need to be aware of the high probability of disappointment and ask why this should be the case. Iridium’s analysis has identified three key areas that are commonly overlooked by company owners, directors and senior management that can play a part in improving the odds of success:

1. There are different dynamics at play in the primary and secondary market:

- The primary market is where shares are issued

- The secondary market is where shares are traded

Successful issuers recognize