SMEs granted their wish list
New dubai stock market to make iPos easier for both local, iNt’l firms
SMEs are a key engine of our national economy. The launch of the Nasdaq Dubai Growth Market is a strategic step that will support this vital sector by opening new horizons for its companies and providing them with investment resources to expand their business and enhance their attractiveness in global markets
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council dubai — Dubai on Tuesday launched a new stock market for emerging companies and small and medium enterprises (SMEs) with the goal of raising capital through initial public offerings (IPOs).
The Nasdaq Dubai Growth Market was launched by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, under the umbrella of Nasdaq Dubai. It allows SMEs to list businesses valued below $250 million (Dh917.5 million) with a minimum operating history of one year compared to three years for Nasdaq Dubai’s main market.
Like Nasdaq Dubai’s main equity market, the Growth Market will allow owners of an enterprise to carry out their IPO while selling as little as 25 per cent of the shares in their company.
“SMEs are a key engine of our national economy. The launch of the Nasdaq Dubai Growth Market is a strategic step that will support this vital sector by opening new horizons for its companies and providing them with investment resources to expand their business and enhance their attractiveness in global markets,” said Sheikh Hamdan.
Nasdaq Dubai intends to launch the Growth Market in early 2021 in line with the first IPOs. A number of companies have already appointed advisors to begin the IPO process, an official statement said on Tuesday.
The Nasdaq Dubai Growth Market will not only list companies from the UAE, but also from around the world to help them expand in the region and internationally.
Nasdaq Dubai is working with government bodies, UAE free zones and expert advisory companies as partners to launch the new stock market. The advisors will include financial advisory firms, investment banks, law and accounting firms, which will provide tailored support including pre-IPO awareness and readiness exercises.
Companies that are not ready for an IPO will be able to join the Private Market segment of the Growth Market. On the Private Market, a company’s shares are held for safekeeping in Nasdaq Dubai’s Central Securities Depository (CSD).
This is designed to give confidence to investors and moves the company into an exchange environment ahead of a potential listing, said the statement.
Dr Ahmad bin Abdullah Humaid Belhoul Al Falasi, UAE
Minister of State for Entrepreneurship and SMEs, said during the recently-held Annual Investment Meeting (AIM) 2020 that SMEs are significant contributors to the global economy, representing 90 per cent of businesses and over 50 per cent of employment worldwide.
“In the UAE, SMEs are backbone of the economy, contributing almost 50 per cent to GDP,” he said during the summit.
“The Growth Market is set to play a key role in the future of capital-raising and the channelling of investment to enterprising companies to enable them to succeed during all phases of the business cycle supported by their Dubai listing,” said Essa Kazim, governor of the Dubai International Financial Centre and chairman of the Dubai Financial Market (DFM).
“The Nasdaq Dubai Growth Market has been strategically designed to attract a wide range of companies across a variety of sectors and geographies, with a straightforward listing process to provide a seamless journey to going public,” said Hamed Ali, CEO of Nasdaq Dubai and deputy CEO of the DFM.
Anish Mehta, chairman of the Institute of Chartered Accountants of India – Dubai Chapter, said SMEs play an important role in any economy and establishment of the new bourse is a step in the right direction. “As it is commonly used that ‘one size does not fit all’, this also applies in relation to raising finances by SMEs who cannot go to large stock exchanges to fulfill their finance needs and have to look to the banks. With the launch of the Nasdaq Dubai Growth Market, similar to the Alternative Investment Market in London, it will open doors for SMEs to have equal opportunity to expand their business and fulfill their financing needs at much affordable costs,” he said.
He added that the new bourse will promote more corporate governance and compliances.
The Growth Market is set to play a key role in the future of capital-raising and the channelling of investment to enterprising companies Essa Kazim, Governor of DIFC and chairman of DFM