i-, _~ .,> ' -» "• • '* AD GRANT NUMBER DAMD17-94-J-4420 TITLE: Crystallization and Structure Determination of the Human Estrogen Receptor by X-Ray Diffraction PRINCIPAL INVESTIGATOR: Stephen C. Harrison, Ph.D. CONTRACTING ORGANIZATION: Children's Hospital Boston, Massachusetts 02115 REPORT DATE: November 1997 DTIC QUALITY IN8PESGTEJD 8 TYPE OF REPORT: Final PREPARED FOR: Commander U.S. Army Medical Research and Materiel Command Fort Detrick, Frederick, Maryland 21702-5012 DISTRIBUTION STATEMENT: Approved for public release; distribution unlimited The views, opinions and/or findings contained in this report are those of the author(s) and should not be construed as an official Department of the Army position, policy or decision unless so designated by other documentation. 19980420 142
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MENA IPO EyeQ1 2016
Inside Q1 2016 highlights 2
Key trends impacting MENA IPOs 4
Broader outlook 7
Summary of IPOs 8
Key events to look out for 11
Contacts 11
2 | MENA IPO Eye — Q1 2016
The MENA IPO Eye is a quarterly publication covering the MENA IPO markets.
Through the publication we intend to highlight the latest developments, market trends and outlook in IPO activity in the region, providing valuable insights for companies looking to float in the future.
Mayur Pau MENA Financial Services Leader, Strategic Growth Markets and IPO Leader
Q1 2016 highlightsLimited IPO activity continues in the MENA capital markets
The Middle East and North Africa (MENA) region witnessed two IPOs in Q1 2016, collectively raising US$615.0m, and indicative another quarter with limited IPO activity.
Capital raised through MENA firms in Q1 2016 increased by 141%, while the number of IPOs were the same (two) as Q1 2015.
The IPO of Middle East Healthcare Company on the Saudi Stock Exchange (SE, Tadawul) was the largest IPO in the quarter raising US$471.1m. It was more than three times the size of the IPO of Arabian Food Industries Company (Domty) on the Egyptian Stock Exchange (Egypt SE), the only other IPO in MENA in Q1 2016.
Two IPOs in Q1 2016
Company Domicile Sector Amount (US$m) Listing date Listing Exchange
Middle East Healthcare Company
KSA** Health care 471.1 9 March 2016 Saudi SE
Arabian Food Industries Company (Domty)
Egypt Food and beverages
143.9 17 March 2016 Egypt SE*
Total 615.0
Source: Zawya and Capital IQ. *SE: stock exchange ** Kingdom of Saudi Arabia Note: The value of the IPO for the Arabian Food Industries Company (Domty) was US$143.9m, as reported in Capital IQ on 28 March 2016. Following the cut-off date for this publication, Capital IQ has updated the value of the IPO to US$126.9m to reflect the currency devaluation during the subscription period (from Monday 14 March 2016) between the EGP and US$.
Oil price fluctuation continues to drive MENA stock market performance
Oil prices declined in January 2016 to the lowest level in several years (less than US$30 per barrel) resulting in fluctuations across the MENA capital markets. According to analysts, brent crude oil prices declined primarily due to an increase in global oil supply and a decrease in demand driven by uncertainty in the performance of the global economy.
However, the price of brent crude appears to have recovered to some extent toward the end of the quarter, trading at around US$40 per barrel and resulting in an uptick in MENA stock market performance.
Companies from Egypt and Saudi Arabia continue to lead the limited IPO activity in MENA
Egypt and Saudi Arabia continued to be the most active in MENA exchanges in Q1 2016, continuing on from 2015 when IPOs in Saudi Arabia and Egypt represented eight out 14 IPOs executed in that year.
Both markets continue to attract investors against a backdrop of increasing foreign investment, political stability, emphasis on diversification and business confidence.
“Q1 2016 witnessed limited IPO activity, in line with H2 2015, as fluctuations in the MENA capital markets continued. These fluctuations were primarily driven by low oil prices and certain global factors. Egypt and the KSA continue to lead this limited IPO activity. We believe a strong pipeline of companies in MENA continue to be waiting for the right time to go to market.”
Mayur Pau, EY MENA IPO Leader
3MENA IPO Eye — Q1 2016 |
Two IPOs in Q1 2016
Company Details
Arabian Food Industries Company (Domty) Amount raised: US$143.9m in Egypt SE Shares offered: 122,500,000 Equity offered: 49% Price range: EGP8.8–EGP9.2 per share Subscription period: 6 Mar to 17 Mar 2016
Middle East Healthcare Company Amount raised: US$471.1m in Saudi SE Shares offered: 27,612,000 Equity offered: 30% Price: SAR10 per share Subscription period: 3 Mar to 9 Mar 2016
Source: Zawya and Capital IQ. Note: *Updated on 28 March 2016.
Q1 2016 highlights• Q1 2016 witnessed two IPOs raising a total capital of US$615.0m, with the IPO of Arabian Food Industries Company (Domty)
and Middle East Healthcare Company on the Egyptian and Saudi Stock exchanges respectively.
• Q1 2016 represented another quarter with limited IPO activity, driven by continuing fluctuations in oil prices, global economic factors and regional tensions.
Highlights from the Q4 2015 MENA IPO Eye edition• Q4 2015 witnessed two IPOs raising a total capital of US$118.7m, with the IPO of Al-Andalus Real Estate Company being the first
IPO on the Tadawul since the market opened up to foreign direct ownership.
• There were only these two IPOs in H2 2015, compared with H1 2015, which saw 12 IPOs raising a capital of US$2.3b. The decline in IPO activity is primarily due to companies deferring IPO plans, given the continuing global economic slowdown, declining oil prices and market fluctuations.
Sources: OPEC and Energy Information Association (EIA).
Government expenditure (US$b)
0200400600800
1,0001,200
2016f 2017f 2018f
US$
b
MENA government expenditureGCC government expenditure
938.5 944.5 977.3
543.2 544.9 557.3
Source: Business Monitor International (BMI).
• According to the International Monetary Fund (IMF), the MENA region is expected to register a GDP growth of 3.8% in 2016, compared with 2.3% in 2015.
• Against the backdrop of declining oil revenues and regional conflicts, MENA countries have revised their GDP projections.
• Crude oil price declined to US$23 per barrel in January 2016 but recovered to around US$40 towards the end of Q1 2016. The IEA estimates that prices have stabilized and should recover further during 2016.
• Key factors impacting oil price fluctuations are the continuing oil supply glut, with further supply expected to come online following the lifting of sanctions on Iran, and global oil demand from the key global markets.
• The oil price may be impacted by the meeting of OPEC and certain non-OPEC oil producers in April 2016 to discuss oil production levels.
• In Q1 2016, government expenditure in MENA is forecasted to total US$938.5b and that of the GCC, US$543.2b, by the end of 2016.
• MENA regional governments have revised spending plans to address government budget deficits.
5MENA IPO Eye — Q1 2016 |
Equity market trends
MENA PE and DY
Casablanca SE Kuwait SETunis SE Saudi SEQatar SE Abu Dhabi SEMuscat SM Egypt SEDubai FM Bahrain SE
3.3%
8.9x
2.8%
9.2x
2.5%
9.3x
3.1%
10.1x
4.3%
10.7x
5.2%
12.3x
3.7%
12.4x
3.0%
13.0x
4.6%
14.3x
4.0%
17.7x
0 5 10 15 20
DY
PE
Source: Zawya and Capital IQ. Note: As of 28 March 2016.
MENA stock market returns — Q1 2016
Stock market Market cap (US$b) Year-to-date (YTD) return to 28 March 2016 (%)
Saudi SE 383.9 -9.5%
Qatar SE 152.3 -1.3%
Abu Dhabi SE 121.4 -0.1%
Kuwait SE 88.8 -6.6%
Dubai FM 79.8 4.1%
Egypt SE 49.8 6.8%
Bahrain SE 49.1 -4.8%
Casablanca SE 48.9 6.9%
Muscat SM 22.2 2.4%
Tunis SE 9.2 9.0%
Source: Zawya and Capital IQ. Note: As of 28 March 2016.
• Several regional markets have witnessed negative YTD returns due to a global slowdown and fluctuating oil prices, with the notable exception of Dubai FM, Egypt SE and Muscat SM.
• Regional market performances have been steady compared to December 2015, with an average price-to-earnings (PE) ratio of 11.8x as of March 2016 (11.4x as of December 2015). The average dividend yield (DY) of regional stock markets as of March 2016 was 4.0% (4.1% as of December 2015).
6 | MENA IPO Eye — Q1 2016
Regional stock market performance — YTD 2016 (%)
-25
-20
-15
-10
-5
0
5
10
1 Jan 16
8 Jan 16
15 Jan 16
22 Jan 16
29 Jan 16
5 Feb 1
6
12 Feb 16
19 Feb 16
26 Feb 16
4 Mar
16
11 Mar
16
18 Mar
16
25 Mar
16
Mar
ket r
etur
n (%
cha
nge)
Abu Dhabi SE Bahrain SE Dubai FM Kuwait SE Muscat SM Qatar SE Saudi SE Egypt SE
Source: Zawya and Capital IQ. Note: *As of 27 March 2016.
MENA IPO activity versus global IPO trends
Global IPO activity witnessed a decline of 82% in capital raised in Q1 2016 to deliver a total of US$12.1b compared US$67.7b in Q4 2015. There was a decline of 70% in capital raised in Q1 2016 compared to Q1 2015 (US$39.9b).
MENA IPO activity, on the other hand, witnessed two IPOs in Q1 2016. Both IPOs collectively raised US$0.6b in Q1 2016 compared with US$0.3b in Q1 2015.
Global IPO activity (Q1 2011–Q1 2016)*
46.965.4
28.7 29.2 18.0 43.8 29.6 37.2 24.446.3
25.6
74.947.2
72.7 67.4 71.939.9
70.2
19.3
67.7
12.1
306384
293 260203 243
192 201 163 205 202
325262 335
277 366 274
430
210
346
167
0100200300400500
0
20
40
60
80
Q1 11Q2 11
Q3 11Q4 11
Q1 12Q2 12
Q3 12Q4 12
Q1 13Q2 13
Q3 13Q4 13
Q1 14Q2 14
Q3 14Q4 14
Q1 15Q2 15
Q3 15Q4 15
Q1 16
Vol
ume
(no.
of I
POs)
Capi
tal R
aise
d (U
S $b
)
Capital raised (US$b) Volume (number of IPOs)
Source: EY.
7MENA IPO Eye — Q1 2016 |
Broader outlookLimited IPO activity to continue
Given the continuing uncertainty in global economic performance and fluctuating oil prices, the outlook for MENA IPO activity is likely to remain subdued in 2016 unless oil prices and market confidence improves.
The key drivers to MENA IPO activity continue to be oil prices and oil over supply, regional geopolitical factors and the performance of the global economy.
The outcome of the meeting between OPEC and certain non-OPEC oil producers in April 2016, where they will discuss oil production levels, may have an impact on oil prices and the MENA capital markets.
MENA governments focusing on diversification and privatization
MENA regional governments have shifted their focus towards diversifying their oil-based economies and see privatization of certain government assets as a route to unlock value and encourage private and foreign investors to participate in the capital markets.
Several reforms and initiatives have been mandated by the regional governments against the backdrop of declining oil prices. For example, Saudi Arabia recently unveiled its diversification policy which included plans to diversify into sectors including IT, tourism and healthcare.
Saudi Arabia has also taken the lead in privatization efforts, including plans to privatize/IPO the remaining airports and related assets, the Saudi Stock Exchange (Tadawul) and other key utility assets.
There have also been several announcements relating to the proposed IPO of Saudi Aramco, the world’s largest oil company, with a potential enterprise value US$2.2t which is being five times bigger than Exxon Mobil.
According to Gulf News, the IPO plans of Saudi Aramco are likely to take shape in 2017 and are seen as a way to revive foreign investment into the country following the introduction of new foreign investment rules which came into force during 2015.
“ Many were saying that the idea of IPOing Aramco was just an attempt to get liquidity to cover Saudi financial needs, but that’s far from the truth. The objective is to diversify income. This is the main objective. Therefore, IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil.”
Saudi Deputy Crown Prince Mohammad Bin Salman, Bloomberg, Gulf News
Egypt — a positive IPO story
Egypt is expected to continue to be one of the few relatively active MENA IPO markets in 2016 as Egyptian companies continue to attract local and foreign investors.
The IPO pipeline still remains strong
According to Zawya Research Monitor, around 61 companies from the MENA region have plans to go public from 2016 to 2018. Some of the prominent names include Tadawul (Saudi Arabia), Daman Investments (UAE), Riyadh Cables Group of Companies (Saudi Arabia), Yamamah Steel Industries Co. (Saudi Arabia), Kuwait Airways (Kuwait), Middle East Oil Refinery (Egypt), and Jindal Shadeed Iron & Steel Company (Oman).
“ While the region’s IPO pipeline may be less robust this year than in years past, we’re still seeing significant appetite from companies interested in going to market as conditions improve.”
Mr. Karim Awad, Chief Executive Officer, EFG Hermes
Broader outlook — highlights• With continuing uncertainty in the global economic
performance and fluctuating oil prices, MENA IPO activity is likely to remain subdued in 2016 unless oil prices and market confidence improves.
• Saudi Arabia and Egypt are likely to continue to be the most active MENA IPO markets in 2016 on the basis of their respective drivers.
• We believe a strong pipeline of companies in MENA continue to be waiting for the right time to go to market.
8 | MENA IPO Eye — Q1 2016
Summary of IPOsSummary of companies listed from Q4 2014 to Q1 2016
Date (quarter)* Issuer Size of offering (US$m)
Sector Exchange
Q1 2016 — 17 March Arabian Food Industries Company (Domty) 143.89 Food and Beverages Egypt SE
Q1 2016 — 9 March Middle East Healthcare Company 471.06 Real Estate Saudi SE
Q4 2015 — 23 December Al-Andalus Real Estate Company 100.80 Real estate Saudi SE
Q4 2015 — 2 December AFMA SA 17.95 Financial services Casablanca SE
Q2 2015 — 25 June Emaar Misr 298.8 Real estate Egypt SE
Q2 2015 — 23 June Zain Iraq 0.004 Telecommunications Iraq
Q2 2015 — 9 June Saudi Ground Services Company 751.96 Transport Saudi SE
Q2 2015 — 8 June Phoenix Power Company SAOG 146.28 Power and utilities Muscat SM
Q2 2015 — 15 May Total-Maroc 73.90 Oil and gas Casablanca SE
Q2 2015 — 20 May Universal Automobile Distributors Holding 42.01 Transport Tunis SE
Q2 2015 — 11 May Integrated Diagnostics Holdings PLC 290.22 Healthcare London SE
Q2 2015 — 28 April Saudi Company for Hardware 134.40 Industrial manufacturing Saudi SE
Q2 2015 — 14 April Middle East Paper Company, Saudi Arabia 119.98 Industrial manufacturing Saudi SE
Q2 2015 — 1 April Edita Food Industries 263.00 Food and beverages Egypt SE, London SE
Q1 2015 — 4 March Orascom Construction Ltd. 185.00 Construction Egypt SE, NASDAQ Dubai
Q1 2015 — 4 January Orascom Hotels & Development 70.68 Leisure and tourism Egypt SE
Q4 2014 — 12 December Cerealis 5.34 Food and beverages Tunis SE
Q4 2014 — 3 December Résidences Dar Saada SA 127.82 Real estate Casablanca SE
Q4 2014 — 30 November Dubai Parks and Resorts PJSC 695.35 Leisure and tourism Dubai Financial Market (DFM)
Q4 2014 — 17 November Electrical Industries Company 194.30 Industrial manufacturing Saudi SE
Q4 2014 — 5 November RAK Petroleum Public Company Limited 2.91 Oil and gas Oslo SE (Norway)
Smart Villages Development And Management Company Real estate
Wadi Group Agriculture
Misr Italia Real estate
United Bank of Egypt Financial services
Arab Investment Bank Financial services
Arabtec Egypt for Construction SAE Construction
Al Ahly Sporting Club Education
Beta Egypt Real estate**
Cairo for Development and Cars Manufacturing Transport*
Food Industries Holding Company Food and beverages*
Middle East Oil Refinery Oil and gas*
Rooya Group Real estate
Oman Sama Telecommunications Telecommunications
Connect Arabia LLC Telecommunications
Oman Qatar Insurance Company SAOC Financial services
Al Khonji Real Estate & Development L.L.C. Real estate*
Falcon Insurance Company SAOC Financial services*
Jindal Shadeed Iron & Steel Co. LLC Mining and metals*
Kunooz Oman Holding Conglomerates*
Oman Reinsurance Company S.A.O.C Financial services*
Qatar Barwa Bank Q.S.C. Financial services
QIC International L.L.C. Financial services
Qatar Airways Transport*
UrbaCon Trading & Contracting Construction**
Al-Sulaiman Holding Conglomerates*
ELAN Qatar W.L.L. Services*
Kuwait Kuwait Airways Corporation K.S.C. Transport
Algeria Biopharm SPA Healthcare
Societe des Ciments de Ain El Industrial manufacturing
Jordan Amman Stock Exchange Financial services*
Lebanon Middle East Airlines Transport*
Source: Zawya. Note: *Delayed IPO; **Rumored IPO Note: The IPO pipeline only includes companies where updated announcements, rumors have been made post Q4 2014.
11MENA IPO Eye — Q1 2016 |
Key events to look out forName of the event Date Theme
Middle Eastern M&A and Private Equity Forum 2016, Dubai
May 2016 This flagship event will provide the opportunity to hear from expert speakers who will discuss and debate M&A activity in the Middle East and the wider emerging markets. Sessions will also explore future investment opportunities for dealmakers over the next year.
Mayur Pau MENA Financial Services Leader, Strategic Growth Markets and IPO Leader
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The MENA practice of EY has been operating in the Region since 1923. For over 90 years, we have grown to over 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the Region.
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