The UAE financial markets witnessed 3 initial public offerings of new companies during the past period of this year.
The initial offerings are Alef Education, Spinneys, and Parkin, in a move that contributed to increasing the depth of the markets, enhancing their investment attractiveness, and attracting a new segment of investors, thus consolidating the position of the financial markets in the Emirates as one of the most important financial and business markets in the world.
According to the Emirates News Agency, the new offerings raised more than AED 4.8 billion ($1.31 billion), amidst record demand from investors, sovereign funds and global investment portfolios, with total demand for these offerings reaching more than AED 404 billion, reflecting the great confidence in the strong economic approach adopted by the UAE in its major companies and institutions.
The Alef Education offering raised around AED 1.89 billion through the sale of 1.4 billion shares, representing 20 percent of the company’s shares, at an offering price of AED 1.34 per share, making it the first offering to be witnessed by the Abu Dhabi Securities Exchange this year.
The total subscription requests for the Spinneys offering exceeded 64 times for all investor segments combined (excluding the main investor), which is the highest level of demand and the highest coverage rate among non-government IPOs on the Dubai Financial Market in recent years, while the size of the Parkin offering amounted to approximately 749.7 million ordinary shares, equivalent to 24.99 percent of the total issued shares, representing the highest level of subscription ever on the Dubai Financial Market.
Financial market experts and financial analysts said that the new offerings in the local markets succeeded in providing attractive opportunities and broader investment options for investors to participate in the strong growth of the national economy, and paved the way for companies to begin their journey in the UAE markets, which are one of the most important financial markets at the regional and global levels.
Many local companies are moving forward with their plans to list on the Abu Dhabi Securities Exchange and the Dubai Financial Market in the coming years, after the markets have so far shown their resilience in the face of global fluctuations following the record successes of initial public offerings over the past three years for giant companies such as DEWA, Alpha Dhabi, ADNOC Drilling, Multiply, Americana, Abu Dhabi Ports, TECOM, Salik, Bayanat and Empower.
“The UAE markets are expected to witness a significant momentum in IPOs this year, as local, regional and international investors’ appetite for well-performing and financially sound national companies increases,” said Aaron Leslie John, Senior Market Analyst at Century Financial. “The success of the UAE IPOs is a testament to the country’s commitment to diversifying its economy and its ability to provide an attractive environment for companies and investors, and an indicator of the confidence enjoyed by the national economy,” he added.
He pointed out the possibility of more companies being launched in the coming months, as markets are expected to witness a boom in initial public offerings for financial technology companies, driven by strong demand from investors.
For his part, Karim El Solh, Co-Founder and CEO of Gulf Capital, pointed out that developing active local capital markets plays an important role as one of the UAE government’s initiatives to support local growth and encourage private companies seeking to achieve growth and liquidity, through listing on the financial markets.
