Gulf IPO boom fizzles

GLOBAL banks and Gulf-based lenders are increasingly looking beyond the Middle East for equity-market business as a sharp slowdown in Gulf initial public offerings (IPOs) puts pressure on deal fees, according to a Bloomberg report.

The trend is expected to continue into the final months of 2026, with banks turning to markets such as Egypt, Turkey and India while waiting for a sizeable pipeline of Gulf listings to come to market, the newswire reported.

The shift marks a striking reversal from just a few years ago, when international bankers were rushing into the Gulf to capture a share of one of the world’s hottest IPO markets.

According to Bloomberg data, Gulf listing volumes have been declining since last year and have fallen to less than US$1.1bil so far in 2026.

The prolonged regional conflict has contributed to the slowdown, while uncertainty over the timing of transactions has left banks sitting on mandates that have yet to materialise.

That is prompting even local advisers to look further afield for business, Bloomberg said.

The weakness is particularly notable when compared with other emerging markets (EMs).

Gulf companies have raised less than US$1.37bil through listings this year, according to Bloomberg data, below the amount raised in sub-Saharan Africa.

The gap is set to widen if Dangote Petroleum Refinery goes ahead with a planned IPO of at least US$1.6bil, which would be the largest-ever listing in Africa.

The slowdown represents a major change for financial centres such as Dubai, Abu Dhabi and Riyadh.

Bloomberg notes that the post-pandemic Gulf IPO boom had provided banks with a valuable source of fees at a time when traditional listing centres such as London, Hong Kong and New York were experiencing weaker activity.

Now, the region’s substantial IPO pipeline is being overshadowed by uncertainty over when deals can actually be launched.

The contrast is especially striking because Gulf-backed investors remain highly active elsewhere in financial markets. Based on data compiled by Bloomberg, the value of mergers and acquisitions (M&A) involving Gulf entities rose almost 200% in the first half of 2026 to about US$300bil.

That has created an unusual split for investment banks. They are adding M&A bankers to take advantage of the Gulf’s growing role as a global source of capital, while equity capital markets teams are increasingly looking outside the region for transactions.

HSBC Holdings Plc illustrates the change, according to Bloomberg. The bank has consistently ranked among the leading advisers on Gulf equity capital markets deals.

Yet, it has not completed an IPO in the Gulf this year. Instead, HSBC has found opportunities in Turkey, where secondary share sales have raised US$1.6bil so far in 2026 – almost twice the amount raised a year earlier.

Bloomberg data shows HSBC currently leads Turkey’s league tables with seven such transactions worth a combined US$552mil, compared with two deals worth US$260mil in 2025.

Mohammed Fannouch, HSBC’s co-head of capital markets and advisory for the Middle East, North Africa and Turkey, tells Bloomberg that the bank has more than 50 active mandates covering M&A and listings across the region.

The figure suggests that demand for capital-market services has not disappeared. Instead, the timing of transactions has become much harder to predict.

EFG Hermes is also shifting its attention towards Egypt, where it has established a strong presence, Bloomberg reports.

The investment bank is working on several potential Egyptian IPOs, including a possible Cairo listing of the Egyptian business of fintech unicorn MNT-Halan alongside Citigroup Inc.

It is also helping arrange planned offerings by state-affiliated companies including Banque du Caire SAE and Misr Life Insurance.

EFG Hermes advised on the IPO of a small Egyptian food retailer whose shares have risen almost 150% since its January debut, according to Bloomberg.

Christopher Laing, EFG Hermes’ Dubai-based head of equity capital markets, tells Bloomberg that the bank regards Egypt as a home market and that it has “performed incredibly well” over the past two years.

Laing points to a more stable currency following last year’s devaluation, falling inflation, improving tourism and economic growth as factors that have boosted investor interest.

The search for deal flow is also spreading to India.

Emirates NBD Bank PJSC, which expanded its investment-banking operations during the Gulf’s IPO boom, has increased its presence in India in recent months and acquired a majority stake in RBL Bank, Bloomberg reports.

The Dubai-based lender is also seeking to establish a stronger position in Turkey’s equity capital markets after becoming a regular arranger of international bond deals there.

Emirates NBD and First Abu Dhabi Bank PJSC are among the arrangers for Airtel Money’s planned London listing, another example of Gulf banks following capital across borders.

Hitesh Asarpota, chief executive officer of ENBD Capital, tells Bloomberg that the cross-border activity reflects growing interest from issuers outside the Gulf in accessing the region’s deep pools of liquidity, while Gulf investors are also seeking exposure to international markets.

Bloomberg also highlights how stronger Gulf relationships with overseas governments are creating new opportunities for local banks.

Abu Dhabi and Uzbekistan have deepened investment ties through a series of partnerships, while Abu Dhabi Commercial Bank PJSC recently acted as a book-runner on the London-Tashkent dual listing of Uzbekistan’s National Investment Fund.

Despite the slowdown, Bloomberg reports that global banks such as Goldman Sachs Group Inc and JPMorgan Chase & Co continue to win Gulf mandates.

These firms had increased their presence in the region during the IPO boom, but many of the transactions they have secured have yet to materialise.

EFG Hermes’ Laing tells Bloomberg he expects “lots of new business in the Gulf”, with the bank having recently secured several new Saudi Arabian mandates.

However, he expects many of those deals to launch only next year.

That timing could keep pressure on Gulf-focused equity bankers through the rest of 2026, even if the longer-term pipeline remains intact.

Bloomberg also points to a possible change in the type of transactions generating fees.

During the Gulf IPO boom, banks benefitted heavily from governments selling stakes in major assets as part of efforts to deepen capital markets.

Over the past two months, however, some banks have worked on two take-private transactions instead.

For banks that once relied heavily on Gulf IPOs, the immediate challenge is therefore less about whether deals exist than when they can be completed.

Until the regional market regains enough certainty for issuers to proceed, the trend suggests investment banks will continue looking to other EMs to keep their equity businesses moving.