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Partners in Growth

IPO MARKET DURING 2007. GULF CAPITAL RESEARCH GROUP. Partners in Growth. 1. Outline. 1. Macro Overview Of The GCC. 2. Overview Of The IPO Market In The GCC. 2. 2. 2. Partners in Growth. MACRO OVERVIEW OF THE GCC. 3. 3. Strong Growth in the GCC. “GCC IPO Market”.

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Partners in Growth

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  1. IPO MARKET DURING 2007 GULF CAPITAL RESEARCH GROUP PartnersinGrowth 1

  2. Outline 1. Macro Overview Of The GCC 2. Overview Of The IPO Market In The GCC 2 2 2 PartnersinGrowth

  3. MACRO OVERVIEW OF THE GCC 3 3

  4. Strong Growth in the GCC “GCC IPO Market” 2006-2007 GDP GROWTH Prospects of strong economic growth have continued Sources: IMF World Economic Outlook (October 2007), Gulf Capital 4 4 4 PartnersinGrowth

  5. Stock Market Performance “GCC IPO Market” 2004-2007 Stock Market Performance GCC stock markets have reversed the downward trend of 2006, increasing by an average 36% during 2007-to-date Since the beginning of 2007, all GCC indices witnessed a positive trend Sources: Nasdaq, LSE, BSE Index, MSM-30, KSE Index, DSM index, NBAD index, Tadawul 5 5 5 PartnersinGrowth

  6. OVERVIEW OF THE IPO MARKET IN THE GCC 6 6

  7. Rising Number Of IPOs “GCC IPO Market” Number Of IPOs In The GCC Number Number of IPOs rose during last couple years in GCC … Sources: Zawya, Gulf Capital IPOs include privatization 7 7 7 PartnersinGrowth

  8. Rising Number Of IPOs “GCC IPO Market” Number Of IPOs In The GCC Number 33 IPOs have been closed during 2007, against 23 during 2006… Closed 2007 Sources: Zawya, Gulf Capital IPOs include privatization 8 8 8 PartnersinGrowth

  9. Rising Number Of IPOs “GCC IPO Market” Number Of IPOs In The GCC Number During 2007-2010, 42 IPOs have assigned a manager … Manager assigned Closed 2007 Sources: Zawya, Gulf Capital IPOs include privatization 9 9 9 PartnersinGrowth

  10. Rising Number Of IPOs “GCC IPO Market” Number Of IPOs In The GCC 116 Number And another 41 have announced their intention to conduct an IPO Announced Manager assigned Total IPOs during the 2007-2010 period should exceed 116 Closed 2007 Sources: Zawya, Gulf Capital IPOs include privatization 10 10 10 PartnersinGrowth

  11. 2007 IPOsSize Of Offering “GCC IPO Market” Average 2007 offering size US$ 363 million million 11 Source: Zawya 11 11 PartnersinGrowth

  12. Increasing IPO Size “GCC IPO Market” AVERAGE IPO SIZE million +11% Average IPO size increased by 25% during 2006 and by 11% during 2007 +11% Based on available data, average IPO size is estimated to increase by 11% during 2008-2010 Sources: Zawya, Gulf Capital 12 12 12 PartnersinGrowth

  13. An Increase During 2007 In Amount Raised From IPOs “GCC IPO Market” TOTAL IPOs OFFERINGS billion +60% Total amount raised from IPOs has increased by 60% during 2007 relative to 2006 Sources: Zawya, Gulf Capital 13 13 13 PartnersinGrowth

  14. … And More Will Be Raised In Coming Three Years “GCC IPO Market” AGGREGATE IPO SIZE billion Increased from previous estimates Of the 83 upcoming IPOs in 08-10, 42 “manager-assigned” IPOs and another 41 “announced” IPOs total an estimated $10 billion Sources: Zawya, Gulf Capital 14 14 14 PartnersinGrowth

  15. Markets Are Becoming More Diversified “GCC IPO Market” IPOs BY INDUSTRY Previous IPOs were mainly concentrated in a limited number of sectors * Financial services include insurance IPOs Sources: Zawya, Gulf Capital 15 15 PartnersinGrowth

  16. Markets Are Becoming More Diversified “GCC IPO Market” IPOs BY INDUSTRY … but upcoming IPOs are relatively expanding to new sectors * Financial services include insurance IPOs Sources: Zawya, Gulf Capital 16 16 PartnersinGrowth

  17. Distribution Of Offering By Country “GCC IPO Market” IPO AMOUNTS RAISED million KSA attracted 26 of the 33 IPOs in the GCC during 2007 and UAE witnessed the largest amount of IPO with US$ 6.6 billion Sources: Zawya, Gulf Capital 17 17 17 PartnersinGrowth

  18. IPOs Outperformed Market “GCC IPO Market” 2006-2007 STOCK PERFORMANCE GCC markets increased by an average of 8% during 2006/07-to-date Sources: Gulf Capital 18 18 18 PartnersinGrowth

  19. IPOs Outperformed Market “GCC IPO Market” 2006-2007 STOCK PERFORMANCE IPOs launched did better than overall stock performance, appreciating by an average of 201% Sources: Gulf Capital 19 19 19 PartnersinGrowth

  20. Slowing Down Over-Subscription “GCC IPO Market” OVER-SUBSCRIPTION PER IPO x times Over-subscription levels during 2007 have decreased when compared to 2006 figures -87% Stable from previous estimates Sources: Gulf Capital 20 20 20 PartnersinGrowth

  21. Demand Generated For IPOs “GCC IPO Market” AVERAGE TOTAL DEMAND PER IPO billion The average demand per IPO stood at US$ 3.4 billion at end-2007, compared to US$15.3 billion at end-2006 and US$15.7 billion at end-2005 Projected 08-10offerings$10 B Avg. 2007 demand per IPO$3,411 M Sources: Gulf Capital 21 21 21 PartnersinGrowth

  22. IPOs Are Sold At A Discount And Outperform The Market “GCC IPO Market” PRICE TO BOOK VALUE During 2007, IPOs were sold at a discount to book value and to earnings PRICE TO EARNINGS Sources: Gulf Capital 22 22 22 PartnersinGrowth

  23. PartnersinGrowth

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