Dubai set to witness IPO boom in 2023
EXPERTS: EMIRATE READY TO ATTRACT LISTINGS BY INTERNATIONAL FIRMS
Dubai is all set to better last year’s record of initial public offerings, experts said on the opening day of the inaugural Mena IPO Summit, and the emirate could see listings from international companies as well.
Regional businesses, which earlier considered only international listings, are shifting their attention to look more at the region, and this could buoy the emirate’s IPO market, said Hamed Ali, CEO of Dubai Financial Market.
D33 economic agenda
The recently unveiled Dubai Economic Agenda (D33), too, will drive listings from stateowned and private enterprises, experts added.
Dubai’s logistics capabilities and the access the emirate has to great talent will drive international firms to seek local listings, explained Mohammad Al Bastaki, CEO of Emirates NBD Capital.
Moreover, talented professionals from across the world are now choosing Dubai as their home, said Helal Saeed Al Marri, Director-General of the Dubai Department of Economy and Tourism.
“Family businesses, high net worth individuals, global technology
The UAE, especially Dubai, dominated global initial public offerings (IPOs) in 2022, fetching 23 per cent ($21 billion) of the $91 billion raised in all IPOs worldwide this year.
giants and Web3.0 are also moving to Dubai.”
Several regional and international experts and issuers also said it is the right time for private, family-owned businesses, and small and medium enterprises to list and raise funds for growth and develop financial resilience.
Ali Khalpey, CEO of EFG Hermes Frontier, said Dubai has all the building blocks for companies to come to market. “The capital markets are functioning efficiently, which will result in more IPOs in the short term, especially from firms looking to grow their business,” he explained.
In the past year, the UAE and Saudi Arabia have become hotspots for IPOs even as listings dwindled in London, Hong Kong and New York. The UAE, especially Dubai, dominated global initial public offerings (IPOs) in 2022, fetching 23 per cent ($21 billion) of the $91 billion raised in all IPOs worldwide this year.
The UAE’s pipeline for initial public offerings got off to a strong start yesterday, the opening day of the Mena IPO Summit, where government entities and private companies expressed a keen interest in selling equity while there remains a strong interest in the region.
The UAE, especially Dubai, dominated global IPOs in 2022, fetching 23 per cent ($21 billion) of the $91 billion raised in all IPOs worldwide over the year.
Hamed Ali, the CEO of Dubai Financial Market, said the emirate’s market this year has the potential to surpass last year’s IPO performance as regional businesses, which earlier considered international listings, are shifting their attention towards the region.
Day one of the three-day summit also heard from several regional and international experts and issuers who said it is the right time for private, family-owned businesses and small and medium enterprises to list and raise funds for growth and develop financial resilience.
“The government has played a fundamental role in shaping the economy and serves as a compass for investors to invest in Dubai’s equity stories,” Shaikha Al Marri, Head of Government and Corporate Dubai, HSBC.
She said: “The momentum from 2022 is expected to continue in 2023. By listing Dubai’s crown jewels like DEWA, Dubai is showing the world that the emirate and DFM are open to IPOs of any size.”
WHAT MAKES DUBAI A HOTSPOT FOR IPOS?
But what makes Dubai a popular IPO destination even as listings dwindle in London, Hong Kong and New York? Ibrahim Al Haddad, the CEO of Salik Company PJSC, said Dubai’s attractiveness as an investment and business hub is mainly due to the political and economic stability it provides residents and potential investors. Dubai’s toll operator raised over Dh3.7 billion from its IPO on the DFM. The IPO was oversubscribed 49 times across all tranches, with total gross demand at Dh184.2 billion.
“Much of that [demand] came from domestic and international sources. The required size of the IPO was Dh3.7 billion, and 16 per cent of that was from international investors,” said Al Haddad.
“Dubai’s GDP grew 4.6 per cent year-on-year to reach Dh307.5 billion during the first nine months of 2022, compared with the same period last year. We have seen the impact of that in our IPO experience,” said Al Haddad. The impact of these factors was seen in investments during Salik’s pre- and post-IPO phases.
Moreover, talented professionals from across the world are now choosing Dubai as their home, said Helal Saeed Al Marri, Director-General of the Dubai Department of Economy and Tourism. He added: “Family businesses, high net-worth individuals, global technology giants and Web3.0 also moving to Dubai.
“Overall, along with the progress of the capital market, we did very well. We definitely have a good base for 2023.”
Ali Khalpey, CEO of EFG Hermes Frontier, said Dubai has all the building blocks for companies to come to market, including solid governance.
DUBAI’S IPO SUCCESS STORY
“The capital markets are functioning efficiently, which will result in more IPOs in the short term, especially from firms looking to grow their business,” he said.
Last year, UAE’s financial markets witnessed 11 IPOs, which raised Dh51.2 billion, enhancing their investment potential and attracting a new segment of investors. Dubai’s IPO activity levels were exceptionally high, with listings from state-owned entities DEWA, Salik, Empower and Tecom. Schools operator Taleem listed its shares, too.
The emirate accounted for 40 per cent of IPO activity in the Gulf region last year, representing Dh673 billion.
During a panel discussion, CEOs from four UAE organisations that went public last year discussed the challenges and successes they faced during their IPO journey. Robust planning, a dedicated legal adviser and a clear governance strategy are required to ensure success during a company’s IPO journey.
Abdullah Belhoul, the CEO of Tecom, said: “Having a dedicated team and the right legal adviser committed to the timeline of the IPO helps maintain business as usual while pursuing the IPO journey.” Meanwhile, Thomas Varghese, the CFO of DEWA, said that the CEO’s track record, the company’s vision, financial valuation, and legal frameworks are deciding factors for investors. The utility’s listing was the largest GCC IPO last year, raising $6.1 billion.
Alan Williamson, the CEO of Taaleem, said: “Planning is important, and a strong business foundation is required. However, listing on the DFM is possible within a reasonable time frame.” The school group raised $205 million from its listing in November.
Overall, along with the progress of the capital market, we did very well. We definitely have a good base for 2023.” Helal Saeed Al Marri | Director General of the Dubai Department of Economy and Tourism
$21b or 23 per cent of global IPOs garnered by the UAE in 2022
4.6%
Dubai’s GDP growth at Dh307.5b in first nine months of 2022
Having a dedicated team and the right legal adviser committed to the timeline of the IPO helps maintain business as usual while pursuing the IPO journey.” Abdullah Belhoul | CEO of Tecom
Dubai’s GDP grew 4.6 per cent year-on-year to reach Dh307.5 billion during the first nine months of 2022, compared with the same period last year.”
Ibrahim Al Haddad | CEO of Salik