Wall Street Organizes Field Trips to Red-Hot Gulf IPO Market

(Bloomberg) — Top US banks, including Citigroup Inc. and JPMorgan Chase & Co., are whisking fund managers off to the Middle East’s booming IPO market to meet the flood of companies looking to go public, people familiar with the matter said.

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Bank of America Corp. and others are also considering organizing so-called reverse roadshows for investors, according to the people. Investment giants BlackRock Inc. and Fidelity, as well as hedge funds, are among those to have either participated in the trips or made their own visits, they said.

Once in the Middle East, the money managers are meeting a range of companies, from those planning an initial public offering to others that may consider doing so in the near term, the people said, asking not to be identified discussing confidential information.

The meet-and-greet trips being organized by the US investment banks come amid a surge in IPOs in the Middle East. The region has been a bright spot in an otherwise bleak landscape for share sales, which are near a two-decade low globally as investor demand craters on recession fears.

In the runup to an IPO, companies and their bankers typically tour the world and meet large investors that can buy in to a deal. And while big funds will occasionally make site visits to IPO candidates, it’s rare for them to travel to meet a group en masse.

The Middle East roadshows are also providing the companies with the chance to learn about how best to position themselves in the battle for investors’ money, as well as how fund managers choose which IPOs to back and how much to allocate, one person said.

Representatives for Bank of America and BlackRock declined to comment, while spokespeople for Citigroup, Fidelity and JPMorgan didn’t immediately respond to requests for comment.

Listings Boom

IPOs are continuing at a fast clip in the energy-rich Gulf, buoyed by surging oil prices and deep-pocketed investors. Gulf states account for more than 70% of al $19.6 billion listing proceeds raised across Europe, the Middle East and Africa this year, according to data compiled by Bloomberg.

The top four biggest IPOs in EMEA this year, including those of Dubai Electricity & Water Authority and Borouge, have come from the Gulf, the data show. DEWA’s $6.1 billion listing attracted BlackRock, Vanguard Group Inc. and Fidelity, Bloomberg News has reported.

Elsewhere, Saudi Arabia’s Retal Urban Development Co. attracted institutional orders worth $24 billion for its $384 million IPO this month and Dubai’s latest listing, business-park operator Tecom Group, took little time to cover its book.

“As long as the oil prices remain elevated, the region will still be a winner compared to the world as far as the IPO activity is concerned,” Chirag Doshi, group chief investment officer at Qatar Insurance Company, said in an interview this week.

Read: Energy Prices Help Dealmakers Find a Pocket of Positives at Gulf Summit

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