Oman's wealth fund plans three IPOs amid GCC listing boom

Oman is planning to list two units of state energy company OQ and a manufacturing company on the Muscat Stock Exchange (MSX) as part of efforts to encourage more IPOs on its stock market and further diversify its economy.

The plans for the listings were revealed by the sultanate's sovereign wealth fund, Oman Investment Authority (OIA), which is seeking to exit six assets across various sectors.

"As part of OIA's contribution towards the realisation of Oman Vision 2040, to achieve economic diversification, decrease oil dependence, and empower the private sector, we are announcing the commencement of OIA's national exit plan with six national assets in various sectors," it said on Twitter. Along with the three planned IPOs, OIA also said it plans for full and partial exits from two Asyad projects and "a number of Omran hotels and resorts".

Asyad Group, a $4 billion integrated logistics service provider, is backed by $20bn in government infrastructure spending, according to its website. It comprises of three deep ports, two free zones, an economic zone and operates maritime services with a drydock and a fleet of more than 60 vessels.

Omran (Oman Tourism Development Company) is the largest hotel investment group in the sultanate, whose portfolio comprises 16 hotels offering a total of 2,751 rooms, according to its website. Some of the properties it operates include Alia Jabar Akhdar, JW Marriott, W Muscat Hotel and Masira Island Resort.

The move to divest the assets will "empower the private sector to lead the national economy", "generate revenues for the state's general budget" and "direct revenues to investments in promising sectors", OIA said.

It will also expand the MSX through IPOs, it added.

Oman is looking to boost liquidity in the market and plans to list 35 state-owned companies over the next five years, MSX chief executive Haitham Al Salmi, told Al Arabiya earlier this year.

The exchange aims to have up to three IPOs in the second half of 2022, he said. It aims to meet all the requirements needed to join the FTSE Russell Emerging Markets Index by 2023, he added.

"We are conducting the main talks now with FTSE Russell, and we have completed the technical requirements in terms of internal procedures, but the major challenges are in the market value, liquidity and stock trading," Mr Al Salmi said.

The GCC has seen a boom in IPOs in recent months as regional governments, particularly in the UAE and Saudi Arabia, have embarked on a drive to list profitable state-owned assets and boost their buffers.

In the first quarter of 2022, there were 14 listings across the GCC, which raised approximately $3.9bn in proceeds, compared with three IPOs that raised $295m in the first quarter of 2021 and three offerings in the same period in 2020 that reaped $801m, according to the consultancy EY.

There were nine listings on the Abu Dhabi Securities Exchange last year, including the IPOs of Adnoc Drilling, which raised $1.1bn in October, and Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, which reaped about $795 million.

Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate, began trading on the ADX in February this year, while Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, raised $2bn from its IPO earlier this month, making it the biggest share sale on the exchange.

Last year, Dubai announced plans to list 10 state-owned companies as part of its strategy to double the size of its capital market to Dh3 trillion and attract foreign investment.

The Dubai Electricity and Water Authority was the first government entity to list on the Dubai Finance Market in April, raising $6.1bn, making it the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019.

Dubai's Tecom Group, the operator of business districts that are home to more than 7,800 companies, also announced this week that it may raise as much as $455m from its upcoming IPO on the DFM.