Dubai plans to list 10 state firms in bid to reverse falling trade
November 02 2021 10:14 PM
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An investor looks up at screens displaying stock information at the Dubai Financial Market (file). T
An investor looks up at screens displaying stock information at the Dubai Financial Market (file). The DFM has suffered a slide in trading, with volumes falling in three of the past four years, as a string of companies delisted at a time of declining liquidity and stock prices, while the Covid-19 pandemic has hurt the city’s lifeblood tourism and real estate industries.

Bloomberg / Dubai

Dubai plans to offer stakes in 10 state-owned companies in what may prove to be a test of confidence in a stock market dogged by falling volumes at a time when regional rivals are stepping up sales.
The emirate will sell the shares as part of a move aimed at boosting trading volumes on the city’s financial markets to 3tn dirhams ($817bn), the Dubai media office said in a tweet late Monday without elaborating. It didn’t name the companies or provide a timeline for the offerings.
The Dubai Financial Market has suffered a slide in trading, with volumes falling in three of the past four years, as a string of companies delisted at a time of declining liquidity and stock prices, while the Covid-19 pandemic has hurt the city’s lifeblood tourism and real estate industries. Meantime, new listings in other Middle East financial hubs such as Abu Dhabi and Riyadh are attracting a flood of cash.
“More government listings might help DFM trading volumes pick up, similar to Abu Dhabi, but the question remains why more private sector corporates do not see the DFM as a useful avenue to raise finance,” said Hasnain Malik, the Dubai-based head of research at Tellimer Research. “The main drivers of Dubai stocks remain the recovery in tourism and deregulation of long-term residency.”
The benchmark DFM index rose as much as 4.5% on Tuesday, while bourse operator Dubai Financial Market PJSC jumped more than 14%.
Monday’s announcement followed Deputy Ruler Sheikh Maktoum bin Mohamed bin Rashid al-Maktoum’s first meeting as head of the securities and exchange higher committee, according to the media office. He also approved a 2bn dirham market-making fund to increase liquidity and a 1 billion-dirham fund to support initial public offerings by tech firms, it said.
Though the announcement didn’t specify which state firms may be listed, officials at companies such as Dubai Electricity & Water Authority and Emirates Airline have said in the past that any decisions about IPOs rest with the government.
Dubai has staged just one IPO since 2017, and its only prospect of a listing this year fell through when logistics firm Tristar Transport pulled its offering in April. At the same time, flagship names such as port operator DP World have delisted while others like Emaar Malls and Damac Properties are in the process of doing so.
Elsewhere across the region, demand for new stocks has soared. Investors placed more than $34bn of orders for Adnoc Drilling’s $1.1bn IPO in Abu Dhabi, while Arabian Internet and Communications Services Co attracted 471bn riyals ($126bn) in bids for its $966mn offering last month in Riyadh.
As real estate prices have started to recover, Dubai’s benchmark gauge has eked out gains, but it still trails behind peers in Abu Dhabi and Saudi Arabia.
The DFM index’s market capitalisation stood around $84.6bn by Monday’s close, according to data compiled by Bloomberg. An average of 139mn shares were traded daily in the past 12 months and the most active stocks include banks and real estate.
“It’s quite an ambitious target, but it’s definitely a move in the right direction, and any new listings would be welcomed by the market,” said Salah Shamma, Franklin Templeton’s Dubai-based head of equity investment for the Middle East and North Africa. “There is enough investor appetite and liquidity.”



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