Middle East IPO Summit opens today

The conference this year aims to highlight the solid underlying economic conditions for initial public offerings (IPO) in 2007. After a volatile performance in 2006, which saw US$ 436 billion wiped off GCC market capitalisation, the bourses so far in 2007 have languished in bear territory adding to those losses.

During his presentation Dr. Izzat Dajani, Chief Executive of Investment and Development, Government of Ras Al Khaimah will examine the changing dynamics of regional capital markets. Should self-regulation and corporate governance be precursors to IPOs and should start-ups be allowed to go public and if so why?

Dr. Dajani commented, "Middle East Capital Markets experienced a downturn in fortunes in 2006. Increased self-regulation, stronger Corporate Governance and improved investor confidence are the landmarks of 2007, with a number of IPOs expected across the region. There are promising prospects ahead."

Having seen US$ 320 billion wiped off the TASI alone last year, investors will be eager to learn what contribution IPOs can make to an already depressed market. Locally in the aftermath of 2006, speculation, insider-trading, transparency, disclosure and 'amateur' investors were identified as the key issues responsible for the catastrophic market performance.

However, according to the International Monetary Fund (IMF) it was more a case of excess liquidity and the lack of depth in the regional markets that were the underlying causes. This is a very valid point, supported by the fact that by the end of 2006 there were only 1,607 companies listed on all 14 Arab bourses combined, 58 less than the year before.

Deep Marwaha, Conference Manager for the 2nd Middle East IPO Summit, said, "It is interesting that there should be a difference of opinion between local and international analysts. Locally there is widely-held suspicion and negative sentiment towards the markets whereas internationally a more pragmatic reason is given. However, regional bourses have been led predominantly by sentiment, irrespective of fundamentals in good times as well as bad. The IMF justifies its statement with fact and ultimately it will be those same fundamentals that will lead the regional bourses out of the wilderness with IPOs instrumental to that recovery."

Debate and discussion amongst investment experts, regulators and market leaders will centre on regulatory and industry standards, corporate governance and transparency, reporting standards and internal audit, management changes and restructure. It will also address the costs associated with IPOs and the long-term obligations of public companies as well as the critical factors underpinning oversubscriptions, over-pricing and macro-economic issues affecting IPOs.

An impressive line-up of international and regional financial experts are expected to speak at the event including amongst others, Henry Azzam, Chairman, Dubai International Financial Exchange, Habib Mulla, Chairman, Dubai Financial Services Authority, Zahed Chowdury, Head of Middle East Research, Deutsche Bank, Omar M. El Quqa, Executive VP - Corporate Finance & Treasury, Global Investment House, who are also supporting the event as diamond sponsor.