As many as 12 Gulf retailers are ready to list their businesses on global stock markets if market conditions improve significantly, says HSBC Middle East.
The bank, which has slowly increased lending to the retail sector over the past 18 months, says clients are ready to tap equity markets to fund expansion if the pricing and timing are right.
"We have got somewhere from half a dozen to a dozen retail-weighted family groups who are waiting to list somewhere in the globe," said Nicholas Levitt, the head of commercial banking at HSBC Middle East.
"I think probably the biggest bottleneck at the moment is a lack of confidence in the capital markets as opposed to a lack of confidence in a retailer," he added. "There are a number of companies that are listable tomorrow if the capital conditions were in a more confident state."
The market for initial public offerings has dried up in the past couple of years as the equity indexes in the UAE have experienced weak trading and global markets have been volatile amid sovereign debt problems in Europe.
Mr Levitt's comments came as the HSBC hosted a discussion on the retail sector and the sustainability of its robust growth.
"[Given] the aggregate average of feedback from clients in our sector which we deal with, most retailers are growing at a rate of at least 15 per cent [annually]," said Mr Levitt. "There's obviously differing performance in that."
Landmark Group and Al-Futtaim, two of the biggest retail players in the Middle East, agreed that revenue growth of 15 per cent was easily achievable for the sector this year if companies had operations throughout the Gulf. The average GDP growth in the GCC for this year was expected to be between 3 and 4 per cent, said Vipen Sethi, the chief executive of Landmark.
"I would say 15 per cent is good. If it is for an international group within the GCC, it could be better," he said. "We do feel that retail is very buoyant at this point of time. We really do feel that is sustainable because the trend can only improve."
Landmark Group has a big collection of its own homegrown brands, such as Splash, Max, Emax and Home Centre, as well as international franchises with Reiss, New Look, Lipsy and Koton. John Wartig, the finance director at Al-Futtaim, said that despite the general consensus that tourism had been driving spending in the retail sector, local consumer buying had increased and confidence among shoppers was rising. "If you look at our businesses ... we play more in the consumption market, rather than the tourism market," he said. "From my perspective, [the growth] is more internal consumption, which is a much better, stronger message."
Al-Futtaim has five core businesses: automotive; retail; financial services; property; and electronics and engineering and aims to expand in other countries.
It operates Ikea, Toys "R" Us, Marks & Spencer. Its automotive business is the distributor of Toyota, Lexus, Honda, Volvo, Chrysler and Dodge vehicles in the UAE.
Habtoor Leighton Group, a joint venture between Al Habtoor Group and Leighton Holdings from Australia, could be among local companies to list in the next few years.
Yesterday, Hamish Tyrwhitt, the chief executive of Leighton Holdings, said the UAE venture would be "IPO ready" by 2016.
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