Emaar Development shares recoup losses in debut listing
dubai — Shares of Emaar Development, a subsidiary of Emaar Properties, plunged 4.3 per cent to below Dh6 on the first day of trading but analysts see it as a value buy on the back of its strong parent company Emaar Properties and attractive yields.
The property development company’s shares fell as low as Dh5.60 in morning trade before recovering to close the day at Dh5.77. Its counter recorded 1,502 deals with 48.47 million shares changing hands worth Dh279 million on the day.
Vijay Valecha, chief market analyst, Century Financial, said shares opened sharply lower at Dh5.61 on its opening day as “lack of enthusiasm of the IPO was mainly attributed to the lack of retail participation.”
Valecha noted that the since Emaar Properties is a major heavyweight in the industry and Dubai Financial Market, the share price should recover very soon.
He advised investors to buy on dips on this share.
“It’s under pressure but once the dust settles, investors will eventually look at the long-term fundamentals and see it as a value buy, as it’s very attractive on a yield perspective,” Ayub Ansari, senior analyst at Securities & Investment Co. in Bahrain, told Reuters.
The shares were priced at Dh6.03 in the company’s initial price range, giving the company a market capitalisation of approximately Dh24.1 billion at the time of listing. Final allocations were approximately 93.8 per cent to qualified investors and 6.2 per cent to individual and other investors.
“Already a flagship brand and a market leader in Dubai, our successful IPO demonstrates that regional and international investors are excited by our proven business model, specifically, our backlog of Dh41 billion, our high cash flows and our targeted dividend yield of 8.6 per cent for the next three years, which the company believes is higher than our competitors, and expected to increase in the future,” said Mohamed Alabbar, chairman of Emaar Development.
The DFM index on Wednesday jumped one per cent, boosted by six per cent gain in Gulf Finance House, and over two per cent rise in Emaar Properties and Dubai Investments. Twenty-five scrips ended in the positive territory while six fell on a busy day, with the daily volume reaching 307.8 million in 5,814 trades worth Dh761 million.
The Dubai index is up 3.2 per cent over the past 12 months, lagging a gain of more than 30 per cent by MSCI’s emerging markets index.
— waheedabbas@khaleejtimes.com