Shares in Emaar Malls Group (EMG) have been allocated at 2.90 dirhams apiece following huge demand, giving an overall sale value of 5.8bn dirhams and making it the largest stock sale in the Gulf region since 2008.
Reuters
Dubai
Dubai’s Emaar Properties has priced the initial share sale of its malls business at the top end of the proposed range, marking another milestone in the return of investor confidence in the Gulf Arab state after the financial crisis.
Shares in Emaar Malls Group (EMG) were allocated at 2.90 dirhams apiece following huge demand, giving an overall sale value of 5.8bn dirhams ($1.6bn) and making it the largest stock sale in the Gulf region since 2008.
After years of debt-fuelled expansion, Dubai was hit hard by the global financial crisis and needed a multibillion dollar cash injection by neighbouring emirate Abu Dhabi.
Several of its largest companies have since undergone painful restructurings, while a pick up in revenue from the core industries of travel and tourism - of which EMG’s Dubai Mall is among the biggest draws - has helped to lure investors back.
With a market value of 37.7bn dirhams upon listing, EMG will become the third-largest stock on the Dubai Financial Market when it begins trading on October 2.
It is the biggest initial public offering (IPO) in the Gulf since Saudi Arabian Mining Co (Ma’aden) raised $2.47bn from its debut on the Saudi stock exchange in July 2008.
It will also be the second stock listing on the Dubai bourse in just over a week, following a five-year hiatus, after Marka debuted on September 25.
That IPO - albeit only worth 275mn dirhams - was hugely oversubscribed by investors as well, and the shares jumped 59% on its first trading day as pent-up demand pushed the price higher.
Analysts are expecting a positive reception for EMG too.
“Although the valuation looks a bit stretched, with strong demand from both retail and institutional investors I think the stock might get a good reaction,” said Harshjit Oza, banking and property analyst at Naeem Brokerage in Cairo.
Naeem had estimated at the mid-point of the proposed price range that EMG would be valued at 28.5 times this year’s forecast earnings. That would be above the parent company’s multiple of about 25 times earnings and the wider stock market’s 16, according to Reuters data. Mohamed Alabbar, chairman of Emaar Properties, said the firm was delighted with the response from both professional and retail investors for EMG’s IPO. Emaar is now locked-up for 180 days, meaning it can sell no more shares until the period ends.
Demand for EMG’s offer had been expected to be high since a statement on the day after the announcement of the offer’s 2.50-2.90 dirham price range disclosed institutional investors had already pledged to buy all the shares on offer to them.
A message from the banks arranging the transaction said at the end of last week that bids from investors worth less than the top price would not obtain any shares.
In total, the portion of shares allocated to institutional investors was covered more than 30 times by orders from 470 accounts, while retail investors submitted orders worth over 20 times the amount of shares available to them, the filing said.
Of the offer of 2bn shares, equivalent to 15.4% of EMG, 70% will go to institutional investors and the remaining 30% to retail accounts, it added.
“We have registered significant demand from ultra high-net-worth and institutional investors from across the region,” said Patrick Delivanis, head of investment banking for the Middle East and North Africa at Morgan Stanley, one of the arrangers of the IPO.
There was also high interest from international real estate specialist funds, emerging market dedicated funds and international long-only asset management firms, he added.
Bank of America-Merrill Lynch, JP Morgan Chase and Morgan Stanley were joint global coordinators of the offer, and four other banks acted as joint bookrunners.
Qatar August exports total QR40.8bn
Qatar’s total exports in August reached QR40.8bn, up 0.3% on the same month in 2013, shows preliminary data released by the Ministry of Development Planning and Statistics (MDP&S).
The total exports include goods of domestic origin and re-exports. In August 2014, Qatar imported goods worth QR9.3bn, an increase of 17.5% compared to the same month last year.
The trade balance - the difference between total exports and imports - shows a surplus of QR31.5bn. This is a decrease of QR1.3bn or 3.9% compared to August 2013.
The year-on-year (August 2014 to August 2013) rise in total exports is mainly due to higher export of ‘other groups of commodities’ such as polymers of ethylene in primary forms, unwrought aluminum, acyclic hydrocarbons, reaching QR5.3bn in August 2014. This is an increase of 29.2% compared to August 2013. Re-exports reached QR0.7bn, MDP&S said.
The increase in total exports is partially offset by the drop in exports of petroleum, gases and other hydrocarbons (LNG, condensates, propane and butane). These reached QR26.2bn in August 2014, a decrease by 0.7% compared to August 2013.
Petroleum oils and oils from bituminous minerals (not crude) reached QR2.1bn (11.6%), and petroleum oils and oils from bituminous minerals (crude) reached QR6.6bn (12.8%).
In August 2014, Japan was the top destination of exports from Qatar with QR10.1bn, a share of 24.8% of total exports. South Korea came next with QR6bn (14.8%) followed by India with QR5.6bn (13.6%).
Cars and other automobiles were at the top of the imports with QR0.8bn, an increase by 9.6% compared to August 2013.
