UAE regulator optimistic it will be ‘good year’ for IPOs

The Securities and Commodities Authority expects initial public offerings, including that of Emirates Global Aluminium to go ahead this year, provided the financial market conditions improve, according to a top official.

“We have a couple of IPO requests in the pipeline, but on hold [waiting for] improvement of the financial markets,” Obaid Al Zaabi, deputy chief executive of SCA, said yesterday. “I’m optimistic that this will be a good year. We are going to witness improvements. I think the guys will revisit their decision. There is interest from other companies as well.”

IPO activity in the Middle East and North Africa region picked up in the third quarter of 2018, with value of listings rising 21.9 per cent to $349.9 million through four flotations and Saudi leading offerings, according to EY.

IPO activity could improve with the inclusion of GCC markets in global gauges and regulatory changes, it added.

EGA, the UAE’s biggest industrial company outside the oil and gas sector, said in September it would delay its IPO due to unfavourable market conditions.

Mr Al Zaabi also said the market regulator will work on introducing this year regulations to help develop green products that comply with sustainability goals.

“The products could be carbon bonds, green bonds or any sort of social bonds connected with the environment to keep it safe,” he said.

“It will be a set of products that can be developed and introduced as soon as the framework is approved. That’s what we are working on and that [regulation] will be implemented in the first half of this year.”