GCC ECM To See More Issuances, but Deal Sizes May Shrink Amidst Volatility: HSBC

In the aftermath of the global turmoil unleashed by the Trump tariffs last month, GCC ECM transactions will retain their momentum but with a possible shrinkage in size, according to Samer Deghaili, HSBC’s Co-Head of Capital Markets & Advisory, MENAT.

“I am positive we will see more ECM issuance this year in terms of numbers [compared to 2024],” Deghaili told Zawya.

 He added that this would be particularly true from an IPO perspective, as there will be a higher number of offerings, albeit smaller, “a trend that will continue into early 2026.”

While the impact of the US tariffs has weighed heavily on global equity markets, the GCC remains relatively immune to the volatility, which has been apparent from recent deal flow activity, Deghaili said. “DCM [debt capital market] issuance has been particularly strong, and the market kicked off this month with multiple transactions, many of which are in the billion-dollar-plus bracket. On the ECM side, we have three different situations in the market now.”

Looking at the wider MENA region, LSEG data reveals that equity and equity-related issuances totalled $4.7 billion during the first quarter of 2025.

 HSBC led the MENA ECM underwriting league table with a 24% market share. IPOs accounted for 34% of the activity, with a total of 12 offerings in Q1 2025, raising a combined $1.6 billion. 

HSBC also acted as a bookrunner on ADNOC Gas’ $2.8-billion secondary share sale in February, the proceeds of which contributed to follow-on offerings reaching a 17-year high of $3.1 billion.

“Whether in terms of capital deployment or weighting, investors remain extremely positive about the region. 

Those who have cash holdings are in many cases deploying them very soon, and underweight positions are, in many circumstances, moving to overweight,” he said. “Our IPO pipeline remains extremely busy for the fourth quarter, and we haven’t seen any deals delayed at our end. 

We have multiple mandated deals that we are working towards for Q4, and we are pressing ahead as planned.”

One of the most anticipated IPOs in the UAE this year is the Etihad Airways listing, which may be announced towards the fourth quarter of 2025 and is speculated to be worth $1 billion. 

HSBC is one of the banks tapped for the offering, according to a Reuters report last March. Deghaili counts aviation as one of the sectors that will be in focus this year, along with technology, real estate, and energy. 

According to Deghaili, the region’s ECM is expected to maintain strong liquidity, stemming from a growing interest in the GCC among foreign investors.

“Emerging market funds and hedge funds, many of which now have on-the-ground presence here, are topping up even further in the Middle East as they look to achieve their return targets. 

That could be a catalyst for new global funds as well to access the region,” he said.

Strong M&A pipeline

Saudi Arabia and Abu Dhabi in the UAE will take the lead in dealmaking in the region, Deghaili said.

“We see the current uncertainty as a catalyst for investment banking activity in Saudi Arabia, with deal flow and further consolidation locally on the M&A front,” he said. “In the UAE, from an M&A perspective, we expect a strong year ahead. There are many deals in the pipeline which are coming to close later this year, and a lot of those evaluation numbers are going to be higher.”

According to LSEG data, the value of announced M&A transactions with any MENA involvement reached $66.4 billion during the first three months of 2025, boosted by ADNOC and OMV’s agreements to merge chemicals firms Borouge and Borealis and to acquire Canada’s Nova Chemicals.

The number of deals announced in the region increased 22% to 322 in the quarter, the highest level in three years. HSBC was involved in four deals during this period, valued at a total of $3.16 billion.