Oman's IPO Market Set for Test as Asyad Shipping Plans Stake Sale
In 2023, Oman experienced a record-breaking $2.5 billion from new share offerings, surpassing markets like the UK. However, the sultanate now faces a critical test in 2025 as it assesses investor appetite for initial public offerings (IPOs).
Asyad Group, backed by the Oman Investment Authority, plans to sell at least a 20% stake in its shipping unit, Asyad Shipping Co. This IPO comes amidst muted debuts for previous offerings, including Muscat's largest-ever deal.
The success or failure of Asyad's IPO will be pivotal for the government's divestment program, which targets around 30 assets. Nishit Lakhotia, head of research at SICO Bank, believes success would be a "much-needed catalyst" for future IPOs in Oman.
Recent Omani offerings underperformed, leading to speculation that weak energy prices may have dampened investor enthusiasm for IPOs linked to the oil and chemicals sectors.
Despite these challenges, Asyad Shipping's position as a provider of marine transportation for key exports makes it a "relatively safe and sticky" investment, according to Lakhotia. A generous dividend policy may also attract investors.
Oman lags behind peers like Saudi Arabia and the UAE in its divestment program and capital market development. The Muscat Stock Exchange remains relatively small, with a market capitalization of just over $31 billion.
However, reforms to boost private-sector listings and liquidity are in place, and an improving economic backdrop is enhancing the country's appeal. Stretched valuations may impact potential IPO valuations, but strong debuts in Saudi Arabia suggest domestic appetite for private sector investments.