After four blockbuster years, the Middle East’s initial public offering boom is losing steam as valuations come under scrutiny and listings roar back in the US and Asia. In recent months, the Gulf’s listing volumes have fallen to their lowest since the pandemic, investors have become markedly more selective, and the region’s once-reliable first-day pop has faded. 

The change in sentiment was on show this week as Saudi Arabia’s EFSIM Facilities Management canceled plans for an up to $89 million listing on the kingdom’s main exchange. Saudi Arabia’s sovereign wealth fund has also slowed work on several planned first-time share sales, Bloomberg News has reported. Those moves come as the benchmark Tadawul index has dropped nearly 12% this year. 

The Gulf had been a rare bright spot in recent years, buoyed by government privatisations and a push to deepen local capital markets. But lower oil prices have started to cloud the Middle East’s growth outlook, particularly in Saudi Arabia. Meanwhile, as IPO activity fired back up elsewhere, a region that thrived in a global listings drought suddenly faced competition. 

The most striking shift this year was the sharp drop in IPO volumes across the Gulf, with regional listing proceeds more than halving from $13 billion to under $6 billion in 2025. In the UAE, listings slowed dramatically after the soft debuts of Lulu Retail Holdings PLC and Talabat Holding PLC late last year left investors more cautious. Dubai-based online classifieds platform Dubizzle Ltd. postponed its first-time share sale, a rare example of a pulled deal in the country. Oman, which had briefly outpaced London in IPO volumes in 2024, also saw activity dry up. 

In Saudi Arabia, the EFSIM deal was pulled in part due to generally weaker market demand, people familiar with the matter said. Still, the kingdom’s IPO proceeds held steady compared to last year at roughly $4 billion, helping the kingdom reclaim its title as the Gulf’s busiest listing venue. But most deals came from the private sector as the government eased off on large privatisations.  

“Government IPOs are large tickets, this year the market was not for this,” said Mostafa Gad, head of investment banking at EFG Hermes, one of the leading arranger of share sales in the Gulf. “Postponing the big ones was a very wise idea.”

The shift in sentiment was evident in deal size as well. Last year produced three IPOs nearing $2 billion after strong orderbooks allowed Talabat and Lulu to upsize their offerings late in the process, even though that enthusiasm didn’t carry into trading. In 2025, there was just one billion-dollar deal from low-cost carrier Flynas, and only four transactions topped $500 million.

Investors pushed toward smaller, simpler stories with clearer financials, “Anything above $500 million starts to get difficult,” said Gad, “People are not willing to navigate through a lot of complexity.”

If UAE IPOs slowed, follow-ons filled the gap. Secondary share sales in the emirates climbed toward $5 billion, overtaking IPO proceeds for the first time. Much of that activity came from Abu Dhabi government-backed shareholders trimming stakes to boost free floats, liquidity and index weightings.

Even Qatar, which has largely missed the Gulf-wide share sale boom, saw rare activity: Ooredoo’s multi-million-dollar stake sale by Abu Dhabi Investment Authority became the country’s most significant ECM event in years. Saudi follow-on volumes were more muted than last year, which was dominated by the government’s $12 billion sell-down in oil major Aramco.

Another defining shift came in performance. The 30% plus first-day jumps that had become a feature of Gulf listings started to crack in late 2024 and evaporated in 2025. In Saudi Arabia, the average listing gain turned negative, and only two of the kingdom’s ten largest IPOs now trade above offer. Broader market weakness didn’t help – Saudi equities were among the worst performers in emerging markets this year, dragged down by softer oil prices and concerns that this could dampen government spending. 

Demand has also suffered in recent listings. Riyadh developer Al Ramz’s institutional investor books were only 11 times covered earlier this month, a far cry from the triple-digit oversubscription levels that were the norm months ago.

IPOs in the UAE fared better, but signs of fatigue appeared there too. Even contractor Alec Holdings PJSC – state-backed and the kind of deal that historically delivered a strong debut – traded tepidly on day one and is up a modest 3%. Dubai and Abu Dhabi’s main stock indices overall performed relatively well, but instant double-digit listing gains were no longer a given.

For some, that’s a welcome correction. “Everyone will adjust to the idea that not all IPOs will perform 30–40% on day one,” Gad said. “We’re becoming a mature market.”