Market turmoil surrounding tariffs has raised questions for the Middle East which had been expected to be busy between Eid al-Fitr holidays in early April and Eid al-Adha in early June.

Government-backed Dubai Holding had been targeting the launch of an IPO for a residential REIT last week though a regional banker away from the deal said it could no longer come that soon, given market conditions. Citigroup, Emirates NBD and Morgan Stanley are running the deal.

“No one will advise going ahead this week; no one will launch into that volatility,” said a second regional banker away from the deal, speaking on Monday. “These things take time to feed through and there is at least a week or 10 days of waiting to see what happens.”

Emaar Properties, which is widely seen as a bellwether for Dubai’s property sector and wider markets, fell sharply on Monday though recovered later to close down 2.5%.

A head of ECM in the region away from the REIT cited it as a good name for the current market, adding that they themselves were mandated on a number of transactions including both IPOs and ABBs ready to launch once the window became more stable.

“In a world where inflation is going up and people are talking about stagflation a story with a stable offering and nice yield granted by the sovereign is solid,” said the ECM head, referencing Dubai Holding. “We still see some potential for growth and less impact on the GCC from tariffs. In a world where growth is scarce anything outperforming speaks to all parties.”

“Oil has a big impact as oil is driving a lot of the growth and real estate has also come off,” cautioned the first Middle East banker. “It depends on what happens in Washington. Nothing is cancelled and there is still potential for things. To pretend there is no read across is not right, though the market will perform better than Europe.”

“To an extent, [the region] is protected as it’s not a major exporter but oil price is a large impact,” said the second regional banker.

All three bankers said Etihad Airways, which is one of the most significant IPOs expected in Q2, remains in play with no decision taken yet whether to delay. The REIT is slated to come first with Etihad following, though a long pause could put pressure on that plan.

“If we’re having to delay by more than two weeks it gets hard,” said the second Middle East banker. “If you can’t launch in the next two and a half weeks it’s hard to get done before the second Eid, after which you’re into mid-June to July, which is sub-optimal.”

Saudi IPO candidates United Carton Industries and Ejada Systems need to launch by the end of June before their CMA approvals expire.

While Middle East ECM has been largely a story of IPOs, secondary blocks have increasingly featured with successful offerings from both government backed names such as Adnoc Gas and private sector such as Rasan.

As in Europe these products could prove a useful source of deal flow while volatility remains high.

“It’s clearly not closed for business,” said the ECM head. “There are a number of follow-ons we’re mandated on. The beauty is you just need a decent day to get it done.”

Source: IFR