The Middle East’s 100 largest listed companies

Published in MEED, 19 September 2017

The region might be going through a tough time as a result of low oil prices and political turmoil, but for investors in the region’s largest companies, there is still growth to be found.

The total market capitalisation of the largest listed companies across the Middle East and North Africa (Mena) reached $849bn in this year’s MEED 100, a healthy 11 per cent increase from the $768bn recorded last year. This comes despite a slight dip in their collective net profit, which fell from $56.9bn last year to $54.2bn this year.

The table is, as usual, dominated by banks and other financial services firms. The 47 finance firms are spread across the region, with listings on a dozen different stock markets. Other sectors that are well represented include chemicals and construction (which have 12 firms each) and telecoms, which contributes 10 to the total. Several other sectors are also represented, such as transport, utilities, metals and mining, and food.

Taken as a whole, these companies and sectors offer a fair sample of the most important parts of the region’s economy, with the obvious exception of the oil and gas industry, which remains, for now at least, firmly in private and government hands.

The Saudi Stock Exchange (Tadawul) remains the dominant bourse in the region, hosting 34 of the region’s 100 largest companies, six of which make it into the top 10. The next best-represented stock market is the Qatar Stock Exchange, which has 15 of the top 100 firms. However, in terms of countries, second place is taken by the UAE, which has 18 representatives listed across three exchanges: the Abu Dhabi Securities Exchange (ADX); the Dubai Financial Market (DFM); and the Nasdaq Dubai.

As these numbers make clear, it is the GCC markets that continue to dominate the list, accounting for four out of every five firms in the MEED 100 and just over 89 per cent of their combined market capitalisation of $849bn. A further nine companies are listed on the Tehran Stock Exchange (TSE) in Iran, six on the Casablanca Stock Exchange (CSE) in Morocco, two each on the Amman and Beirut bourses in Jordan and Lebanon respectively, and just one on the Egyptian Exchange (EGX) in Cairo.

Although the strength of the Gulf bourses is a long-standing trend that shows no sign of diminishing, there are plenty of winners and losers within the markets themselves. In all, 38 companies have climbed in the ranking over the past year, while 41 have lost ground and just seven stayed in the same place.

In addition, 11 companies that were included last year are no longer in the MEED 100 and have been replaced by new entrants. Among this latter group, the highest ranking goes to First Abu Dhabi Bank, the institution formed from the merger of First Gulf Bank (11 last year) and National Bank of Abu Dhabi (14), which was completed in April.

The next highest new entrant is another financial institution, DFM-listed Emirates Islamic Bank, at 26. In fact, financial services firms make up six of the 14 new entrants, with others including Burgan Bank (81) and Gulf Bank (92), both of them on Boursa Kuwait, and Saudi Investment Bank (74), which is listed on the Tadawul in Riyadh.

Between them, Boursa Kuwait and the Tadawul contribute 10 of the new entrants, which, alongside the two UAE entrants, means the Gulf has further cemented its dominant position on the list. The only non-GCC companies to join the MEED 100 this year were Gol-e-Gohar Iron Ore Company on the TSE, at 91, and CSE-listed Ciments du Maroc, at 93, which it shares with Bank Audi.

Heading in the other direction, some big names have dropped out of the list. One notable example is theme park operator DXB Entertainments (until September 2016 known as Dubai Parks & Resorts), which was ranked at 63 in last year’s table following its initial public offering on the DFM in late 2014. It has fallen out of the top 100 this year, amid reports that visitor numbers to its parks are taking longer than expected to build up. In May, local media reported that the company had begun a cost-cutting programme.

Other names to have fallen off the list include Kuwait Projects Company (Kipco), which was ranked 79 last year, Islamic Republic of Iran Shipping Lines (86) and National Bank of Ras al-Khaimah (96).

Qatari firms have suffered since MEED’s 2016 analysis of the 100 largest listed companies by market capitalisation, no doubt in part due to the economic boycott of the country led by Saudi Arabia, which began in June. Among the Doha-based firms to have dropped out of the top 100 are shipping company Qatar Navigation (74 last year), telecoms outfit Vodafone Qatar (78), and the Aamal Company conglomerate (83).

Some other companies have managed to hang on to a place in the MEED 100 despite losing a lot of ground. Tehran-listed Ghadir Investment Bank fell back 22 places to 99. Matching its fall was Qatar International Islamic Bank, which also lost 22 places and finished up at 98. Another company to drop back 22 spots was Qatar Gas Transport Company (Nakilat), which is now ranked 82.

On a more positive note, the company to make the biggest improvement over the past year was Tadawul-listed The Company for Cooperative Insurance, which trades as Tawuniya and leapt 31 places from 100 in 2016 to 69 this year. It has seen a steady increase in the value of premiums written and in its profits over the past few years.

Just behind it in terms of the number of places gained was another Saudi firm, Jarir Marketing Company, which climbed 30 places, taking it to 58. It has also been growing steadily, opening three new sites in Saudi Arabia so far this year, taking its total network to 48 shops.

The year ahead could see some important changes in the make-up of the 100 largest publicly-listed companies in the Mena region. Plans to list shares in some divisions of regional oil giants Saudi Aramco and Abu Dhabi National Oil Company are scheduled to move ahead over the next year or so, although no firm time frames have yet been announced. Depending on which divisions are listed and when, there are likely to be some companies on this year’s list that will have to make way for oil firms next year.

Other deals in the offing could also lead to changes in the rankings. For example, Masraf al-Rayan (currently ranked 31) is in talks for a three-way merger with Barwa Bank and International Bank of Qatar – if that goes ahead the enlarged group is likely to rise up the table.