(Bloomberg) -- Oman’s OQ Exploration & Production declined in its debut after a record $2 billion initial public offering, a rarity in the Middle East where listings have typically offered stellar returns in early trading.
Shares in the energy firm fell as low as 355 baisas per share on Monday. That’s 9% below the offer price of 390 baisas, which was at the top of the marketed range. It closed 8.2% lower.
That came amid a slump in the price of crude, which tumbled more than 5% at the start of the week after Israeli strikes against targets in Iran avoided the OPEC member’s crude facilities. That has raised the prospect for easing hostilities in the region.
The Stoxx Europe 600 Energy Index was down just over 2%, making it the worst performing sector in the region Monday.
“Investors are shying away from energy markets,” according to Faisal Hasan, chief investment officer at Al Mal Capital. They are “increasingly pricing in a surplus for energy markets in 2025. Demand growth has been weak, non-OPEC+ supply is robust, and the OPEC+ may look to gain market share rather than defend price levels.”
State energy firm OQ SAOC sold 2 billion shares, or a 25% stake, in its exploration and production unit earlier this month. Six anchor investors snapped up a fifth of the offering, which attracted orders worth $5.4 billion in total.
While that indicated continued interest in Gulf deals despite escalating violence in the wider region, it was lower than the $10.4 billion worth of orders for OQ Gas Networks SAOG’s $748.6 million IPO. That stock surged in its debut.
Elsewhere in the region, investors continued to clamor for shares in companies operating outside the energy sector. In Abu Dhabi and Riyadh, a grocery firm and a financial services company had demand for all stock on offer shortly after books opened on the deals Monday.
Oman is in the midst of an ambitious privatization drive with around 30 assets in the pipeline, and the momentum looks set to continue. OQ is gearing up to list its methanol and liquefied petroleum gas unit in coming days, Bloomberg News has reported. Other deals in the pipeline include logistics company Asyad Group and Oman Electricity Transmission Co.
The OQEP deal was the largest Gulf IPO since Adnoc Gas Plc’s $2.5 billion share sale in 2023, and the fourth largest in the broader Europe, Middle East and Africa region so far this year, according to data compiled by Bloomberg.
(Updates with closing prices in second paragraph.)
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