JPMorgan’s Managing Director and Co-Head of Equity Capital Markets for EMEA and APAC, Aloke Gupte, stated that the initial public offering (IPO) pipeline in the Gulf Cooperation Council (GCC) is set to continue progressing, even with current global market turbulence. While some IPOs may experience slight delays, Gupte believes that the momentum will still outpace the numbers expected for 2024.

Gupte explained to Zawya at the Capital Market Summit in Dubai that the situation has not significantly changed due to the volatility. He noted that the announcement of US tariffs on April 2 caused some delays for IPOs that were ready for launch, pushing them to wait longer than anticipated. Among the most notable delays is the Etihad Airways IPO, originally planned for April, which is valued at $1 billion and is now under review by its main shareholder, the Abu Dhabi sovereign-backed ADQ.

He indicated that there are likely to be a few IPOs postponed until late summer or after, mentioning that an aviation-related offering from the GCC could be one of those affected. Despite these delays, Gupte remains optimistic, stating that the GCC region is expected to shine in the global market, though the outlook has become somewhat more cautious due to rising uncertainty and volatility.

Looking ahead, Gupte expressed confidence in robust IPO activity for 2025, despite ongoing market volatility influenced by a potential trade war, a weakening US dollar, and fluctuating oil prices. He pointed out that 2025 might serve as a year for recovery in IPO activities, though it may not see a massive issuance volume, especially since many large deals were completed in the previous year.

On the topic of local IPOs, Dubai Holding recently announced plans to list a 12.5% stake in a residential real estate investment trust (REIT), a move seen as bold amid economic challenges. Gupte highlighted that this $500 million offering is significant as it marks the first major global IPO since early April, emphasizing that the GCC is largely insulated from external economic shocks.

He also addressed concerns about liquidity in the region, indicating that while GCC economies have shown resilience, there are challenges due to a selective investor base that favors stability over speculative growth. Gupte stressed the importance of understanding liquidity, suggesting that measuring average daily trading volume against free float market cap is crucial. For Dubai, he noted this figure is 0.13%, and for Abu Dhabi, it is 0.15%.

Furthermore, he emphasized the need for a strong domestic investor base in the GCC to foster long-term stability in capital markets. Gupte compared the region with Europe, pointing out that markets with a robust local asset management presence, like the GCC, India, and Japan, have performed better in recent times.