GLOBAL NAVIGATION AND GCC RESILIENCE
Global equity markets gained stronger momentum in Q2 of FY26, building on the measured performance pattern from the preceding quarter. The Nikkei 225 led the quarter with a return of 37.21%, while the S&P 500 rose 14.87% and the FTSE 100 recorded a gain of 3.15%. Compared with Q1 of FY26, the quarter reflected a firmer tone across major benchmarks and a broader improvement in market sentiment. Overall, the period suggests a more constructive global backdrop, supported by a gradual strengthening in risk appetite.
Within the GCC, market performance remained more differentiated. Returns varied meaningfully across exchanges, reflecting differences in domestic liquidity conditions, sector composition and sensitivity to changes in energy prices. The DFM General Index recorded the strongest performance in Q2 of FY26 with a return of 9.59%, followed by the Bahrain All Share Index at 7.56%. The Bursa Kuwait All Share Index and the ADX General Index posted gains of 3.44% and 2.98%, respectively, while the Qatar Exchange Index rose modestly by 0.52%. By contrast, the MSX 30 Index declined by 8.09% and the Tadawul All Share Index fell by 4%, underscoring that GCC market performance during the quarter was shaped more by individual market dynamics than by a uniform regional trend.
Q2 of FY26 marked a more constructive phase for global equity markets, while GCC markets continued to exhibit a more selective, market-specific performance pattern. For IPO markets, this distinction is particularly relevant: although broader sentiment improved during the quarter, execution conditions across the GCC remained closely linked to the depth, liquidity and investor dynamics of individual domestic markets. As a result, IPO prospects across the region continue to be shaped not only by the direction of global markets, but also by the underlying structural strengths of each local exchange.
IPO INDUSTRY TRENDS
GCC OVERVIEW WITH A FOCUS ON SAUDI ARABIA
Q2 of FY26 reflected a measured pace of GCC IPO activity, with total proceeds of USD 0.05 billion raised from one completed transaction. This follows proceeds of USD 0.27 billion in Q1 of FY26 and USD 1.12 billion in Q4 of FY25, highlighting a more calibrated primary market environment through the first half of FY26. Saudi Arabia accounted for the quarter’s issuance, further reinforcing its role as the key driver of IPO activity across the GCC and the market setting the tone for regional issuance momentum.
Across recent quarters, Saudi Arabia has continued to represent the core of the GCC IPO market. In Q2 of FY26, Saudi Arabia accounted for the region’s only completed IPO, with Dar AlBalad for Business Solutions Company listing on the Main Market of the Saudi Exchange. The successful execution of that offering, together with strong subscription levels, highlighted the market’s ability to attract investor interest for well-positioned issuers despite a slower regional issuance backdrop.
From a sector perspective, recent Saudi Arabia IPO activity has been led by Industrials, Manufacturing & Automotive by number of issuers, followed by Consumer Markets, Real Estate, and Technology, Media & Telecommunications, while Real Estate has featured more selectively. This highlights a market that continues to attract issuance across a select group of sectors, with activity remaining anchored in a number of key segments over recent quarters.
The sector proceeds mix indicates that Saudi IPO capital formation has remained anchored in a select group of sectors over recent quarters. Industrials, Manufacturing & Automotive and Real Estate accounted for the largest share of proceeds over the periods under review, while Q2 of FY26’s sole completed offering came from the Technology, Media & Telecommunications sector, highlighting the market’s ability to support different sector themes as issuance windows evolve.
Overall, the period reinforces Saudi Arabia’s importance to the regional IPO landscape, both in terms of execution and pipeline visibility. With the Kingdom continuing to account for a substantial share of GCC activity and publicly reported CMA data indicating 33 submitted IPO applications in Q1 of FY26, accounting for 10 across the Main Market and 23 requests across Nomu, Saudi Arabia appears well placed to remain the principal driver of GCC issuance momentum through the balance of FY26, subject to supportive market conditions.
KNOWLEDGE CORNER
FINANCE TRANSFORMATION: A CRITICAL PILLAR OF THE IPO JOURNEY
An IPO is a defining milestone that reshapes nearly every part of an organization, from governance and legal structure to technology, talent and investor communication. Within that broader transformation, the finance function plays a particularly critical role. It is not simply one of several workstreams in the IPO process; it is the operational backbone that supports a company’s transition to the public markets.
While valuation, prospectus preparation and investor engagement are often the most visible elements of an IPO, their successful execution depends heavily on the strength of the underlying finance function. Every accelerated financial close, timely auditor sign-off, investor ready KPI and compliant market disclosure is ultimately enabled by finance capabilities that are robust, disciplined and fit for a listed environment.
This section focuses on the finance function and the steps required to build public market readiness from a financial reporting, controls, data and governance perspective. As IPO markets across the GCC continue to evolve, the case for investing in finance transformation well ahead of listing has become increasingly compelling.
Finance Transformation Roadmap
Finance transformation should not be viewed as a short-term project undertaken in the final months before listing. It is a structured programme across five core dimensions: People, Processes, Governance, Technology, and Data and typically evolves across three stages of the IPO journey.
| Dimension |
Stage 1 Diagnose & Design |
Stage 2 Execute & Validate |
Stage 3 Optimize & Scale |
| People |
Assess capability gaps within the finance function and define the leadership roles required for a listed entity, including CFO, Controller, Financial Planning & Analysis (“FP&A”) and Investor Relations. |
Recruit or develop listed-company finance leadership and equip teams with the skills required for public company reporting, financial close and investor-facing communication. |
Embed a high-performance culture aligned with regulatory and investor expectations, supported by succession planning for critical finance roles. |
| Processes |
Conduct a comprehensive process diagnostic across all finance cycles to identify inefficiencies, control gaps and deviations and establish a prioritised process improvement roadmap. |
Transform core finance processes – standardising workflows, strengthening controls and embedding reporting rigour to ensure the finance function can consistently deliver to listed-company timelines and quality standards. |
Shorten close timelines, automate reconciliations and embed continuous improvement and control monitoring across all core finance process. |
| Governance |
Establish the governance framework for a listed company, including Board and committee structures, Internal Control over Financial Reporting design, delegation of authority and related-party governance policies. |
Complete Internal Control over Financial Reporting documentation, walkthroughs and testing of design and operating effectiveness prior to listing. |
Maintain an ongoing compliance framework, including evolving requirements around Internal Control over Financial Reporting, risk management and governance oversight. |
| Technology |
Assess the current technology landscape across all finance functions – ERP, consolidation, planning and reporting tools to identify gaps in capability, integration and scalability required to support a listed-company operating model. |
Upgrade or implement systems as needed, including chart of accounts redesign, reporting architecture and cross-functional integrations; deploy real-time dashboards and KPI monitoring tools to track finance transformation progress and readiness milestones. |
Embed AI and advanced analytics across finance operations; automate routine processes, enhance real-time visibility through dynamic dashboards, and future-proof the technology stack against evolving standards such as IFRS 18. |
| Data & reporting |
Establish a data governance foundation defining data ownership, integrity standards and a single source of truth while assessing data migration requirements and security controls needed for a listed-company environment. |
Execute data migration, cleansing and integration across finance systems; implement data security protocols, access controls and audit trails; and align data definitions to support consistent, investor-grade reporting. |
Sustain a resilient data ecosystem with robust security, integrity controls and a single source of truth; continuously enhance data quality and governance frameworks in line with evolving regulatory and investor expectations. |
Stage 1: Diagnose and Design – Establishing the Foundation
In the early stages of the IPO journey, companies assess whether their finance infrastructure can support public market expectations. This diagnostic phase often brings to light gaps in accounting policies, governance arrangements, reporting processes and finance capability that may not be evident in a private-company environment.
A key output is the target operating model for the listed entity, including how the finance function will be structured, resourced and governed. Companies should also design the close calendar early, mapping it to statutory deadlines with time for management review, Audit Committee oversight and auditor procedures.
Accounting policy readiness is equally important. While the accounting framework may remain consistent, the transition to public markets demands a significant uplift in how policies are applied, documented and disclosed with processes redesigned to meet external submission deadlines, investor expectations and the heightened consistency standards of public reporting. Companies should also assess whether their chart of accounts, consolidation framework and segment reporting capabilities are equipped to support listed-company reporting requirements and future developments in financial reporting standards.
Stage 2: Execute and Validate – Preparing for the Market
As the IPO progresses, the focus shifts from design to execution. During this phase, finance teams prepare historical financial information for offering documentation, establish the Internal Controls Over Financial Reporting (ICoFR) framework and strengthen the FP&A capability needed to monitor performance against the equity story.
One of the most valuable practices in this phase is the quarterly mock close exercise. A full simulation of the post-listing reporting cycle allows management to test the readiness of the finance function under real reporting timelines. This includes trial balance finalization, management accounts, assessment and identification of related parties, intercompany eliminations, disclosure of related party transactions, consolidation adjustments and interim disclosure preparation. Companies that conduct such rehearsals before listing are typically better prepared to meet their first reporting deadlines as public companies.
This stage is also critical for investor reporting readiness. KPI definitions used in the prospectus should be fully aligned with post-listing reporting practices. Any disconnect between the metrics presented during the IPO process and those reported after listing can quickly become a credibility issue.
Stage 3: Optimize and Scale – Operating as a Listed Company
Finance transformation does not end at listing. Once a company enters the public markets, the focus shifts to embedding a scalable operating model that can support consistency, quality and credibility over time. Priorities typically include shortening the close cycle, automating reconciliations, enhancing reporting efficiency and strengthening continuous control monitoring.
At this stage, the finance function also needs to adapt to the evolving regulatory and reporting landscape. Reporting frameworks must remain dynamic, with the ability to respond to new governance expectations, disclosure requirements and accounting developments. In particular, companies should ensure that finance systems, KPI frameworks and reporting templates remain fit for purpose as standards and market expectations evolve.
Ultimately, sustained success as a listed company depends not only on completing the IPO, but on building a finance function that can operate effectively in the public markets on an ongoing basis.
From Private to Public: What Changes for Finance
The transition from a private to a listed company imposes a step-change across nearly every dimension of the finance function. The nature and pace of regulatory obligations, the transparency expectations of the market, and the operational demands placed on finance teams are fundamentally different in the public-company environment. The table below maps the key dimensions of this transition against the specific regulatory standards applicable across Saudi Arabia and the UAE:
| Dimension |
Pre-IPO (Private Company) |
Post-IPO (Listed Company) |
Key Standard / Rule |
| Reporting |
Annual financial statements; flexible internal timelines; no mandatory interim reporting. |
- KSA Main Market (Tadawul): Quarterly interim financials within 30 days of period-end.
- KSA Nomu Parallel Market: Half-yearly financials within 45 days of period-end.
- UAE (ADX): Quarterly financials within 45 days of period-end, accompanied by Board report or MD&A.
- UAE (DFM): Quarterly financials within 45 days of period-end.
- IAS 34 Interim Financial Reporting is mandatory for all interim periods across all exchanges.
|
IAS 34; CMA Rules on the Offer of Securities and Continuing Obligations; ADX Listing & Disclosure Regulations; DFM Listing Rules Module Two |
| Controls |
Controls tailored to business needs; often founder or management-driven oversight |
- ICoFR aligned with COSO 2013. Board-approved control environment; documented Risk and Control Matrices (RCMs); annual management assessment.
- UAE: External auditor ICoFR opinion required for FY 2026 (no public disclosure); public disclosure mandatory from FY 2027.
- KSA: Robust internal control systems required under CMA Corporate governance regulation and audit committee oversight mandatory
|
COSO 2013; CMA Corporate Governance Regulations (KSA); SCA Decision No. (3/Chairman) of 2020, as amended by SCA Board Decision No. (2/R.M) of 2024 and SCA Resolution No. (24/Chairman) of 2025 (UAE) |
| Audit |
Annual audit cycle; established auditor relationships; no formal committee oversight requirements. |
- Interim review under ISRE 2410 and annual audit under ISA.
- Mandatory Audit Committee with independent members; formal Audit Committee Charter required.
- External auditors attend Audit Committee meetings and report directly to it.
|
ISRE 2410; ISA 700, 701, 705, 706; CMA Rules on Continuing Obligations; SCA Decision No. (3/Chairman) of 2020 (as amended); ADX/DFM Listing Rules |
| Governance |
Streamlined decision-making proportionate to ownership structure; limited board formality. |
- Formal Board of Directors, Audit Committee, Risk Committee, and Remuneration Committee.
- Documented Delegation of Authority, related-party transaction policy, and insider trading controls.
- UAE: Independent directors required (at least 75% of board); Chairman-CEO dual role permitted; Material RP transactions require General assembly approval
- KSA: Independent directors must comprise at least 2 or one-third of the board, whichever is greater; Chairman-CEO separation is mandatory; Related party transactions require ordinary general assesmbly approval.
|
CMA Corporate Governance Regulations (KSA); SCA Decision No. (3/Chairman) of 2020, as amended by SCA Board Decision No. (2/R.M) of 2024 and SCA Resolution No. (24/Chairman) of 2025 (UAE) |
| Disclosure |
Selective stakeholder communication; no public market transparency obligations. |
- Continuous disclosure obligations: material event announcements without delay.
- Interim earnings releases and Quarterly Management Discussion & Analysis (MD&A).
- Annual integrated report including Board report, audited financials, governance report, and sustainability report.
- Insider dealing notifications.
|
CMA Market Conduct Regulations; Tadawul Listing Rules Ch. 9; ADX Listing & Disclosure Regulations; DFM Listing Rules |
| Technology & Data |
ERP and reporting tools selected for operational need; limited requirements for investor-grade data. |
- ERP must support compressed close cycles, IFRS sub-ledgers, segment reporting, and group consolidation.
- Finance data must enable the production of investor-grade KPIs and MD&A within statutory timelines.
- Preparation for IFRS 18 (effective 1 January 2027) required from 2026 given retrospective application.
|
IFRS 8 (Segment Reporting); IFRS 18 (effective 1 January 2027, replacing IAS 1); IAS 34 |
Navigating the Risks
An under-prepared finance function is one of the most consequential and underappreciated risks in the IPO process. The transition from private to listed status brings heightened regulatory scrutiny, compressed reporting timelines, and a level of market transparency that most private companies have never had to sustain. Four areas of risk deserve particular attention:
Regulatory exposure: Capital market regulators across the GCC impose strict disclosure and reporting deadlines. Failure to meet these requirements can lead to penalties, reputational damage, trading suspension, and, in severe cases, delisting. GCC regulators are increasingly holding individual directors personally liable for governance failures and not just the company. In KSA, directors have faced personal and joint liability for breach of duty, self-dealing, and conflicts of interest. In the UAE, courts have upheld personal liability awards running into hundreds of millions of dirhams against executives who approved major transactions without board authority and withheld critical information from the board. Governance gaps not just a corporate compliance matter now, but also personal legal exposure for every board member.
Audit qualifications vs. Emphasis of Matter, a critical distinction: These are distinct audit outcomes with very different market implications, yet they are frequently misunderstood by management teams unfamiliar with the nuances of audit reporting. An audit qualification signals that financial statements are materially misstated or that the auditor was unable to obtain sufficient evidence – a serious negative signal to regulators and investors alike. An Emphasis of Matter paragraph, by contrast, does not modify the audit opinion; it draws attention to a matter of fundamental importance already disclosed in the financial statements, such as a going concern uncertainty or a significant legal claim. The distinction is material: a company approaching or navigating its early listed life with a qualified opinion faces a fundamentally different regulatory and investor reception than one with an Emphasis of Matter. A qualification can delay or derail a listing, invite heightened CMA scrutiny, and permanently damage investor confidence in management’s financial stewardship. An Emphasis of Matter, while still requiring careful communication, carries no such presumption of misstatement.
Credibility gaps: Misalignment between metrics presented in the prospectus and those reported in the first set of quarterly results can seriously undermine investor trust.
Operational inefficiencies: An inability to close books within the 30-day (or 45-day) statutory window forces a choice between rushing the process, increasing the risk of errors, or missing deadlines and triggering regulatory consequences. Manual processes also increase the likelihood of control deficiencies identified by auditors, which, if assessed as material weaknesses, must be disclosed and can materially affect analyst ratings and investor confidence in the company’s governance.
Finance transformation is a strategic imperative, not a compliance exercise. Companies that invest in people, processes, governance, technology, and data well ahead of their listing are consistently better positioned to navigate the IPO process smoothly, meet post-listing reporting obligations with confidence, and sustain the operational discipline that public markets demand.
In the GCC’s evolving regulatory environment, where reporting timelines are among the most demanding in the region, ICoFR requirements are being progressively strengthened, IFRS 18 is approaching implementation, and capital market regulators are actively enforcing compliance, the cost of under-investment in finance readiness has never been higher. The organizations that will define the next wave of high-quality GCC listings are those that begin the finance transformation journey early and sustain it long after the IPO bell has rung.
