Mawarid to raise Dh1b through IPO

The Shariah-compliant Mawarid Finance aims to raise up to Dh1 billion through the listing of its technology unit, said a senior company official.
The group plans to list the company on the Dubai bourse and a cross-listing on an international bourse, Mohamed Ali Musabeh Al Nuaimi, CEO and managing director of Mawarid Finance, told Khaleej Times in an interview.
"Currently we are looking at the possibility of listing in Dubai and cross-listing at some other international bourse. The IPO will be somewhere between half a billion to one billion dirhams. Our application is with the authorities and the decision when to go public will be taken when there is enough liquidity in the market," he noted.

HSBC, ADS Securities and Mena Corp have reportedly been mandated advisors.
The Dubai-based group merged three technology companies which are into security, government services and financial sectors under Mawarid Technology which has revenue streams from multiple sources, give it stability and more potential to grow. 
Al Nuaimi also revealed that the group is working with its partners for possibly floating entities in food and beverage and healthcare sectors in which the group is a shareholder. "We are at the very early stage and in 2018 we will have a clearer picture. Being a major founder and driver behind those companies, we are a big shareholder but not majority stakeholder," he added. Replying to a query about taking the holding firm Mawarid Finance public, he said: "Our file is ready but the decision has to come from the board."
Steven Drake, PwC Middle East Partner, Head of PwC's Capital Markets and Accounting Advisory Services team in the Middle East, sees a "reasonable pipeline of entities interested in listing on the local market although history tells us that we do not see large volumes on the local exchange. We could reasonably expect to see some listings by the end of the year but perhaps with more activity in FY 2018 if market conditions remain favourable."
According to a recent PwC report, IPO activity in the GCC declined in the second-quarter of 2017 due to market volatility but debt issuances remained popular as the GCC governments and private sector raised $11.5 billion through bonds and sukuks.
During Q2 2017, three companies raised $171 million as compared to two companies raising $274 million in the  same period last year. All the three IPOs were launched at the Saudi markets - Tadawul and the parallel market Nomu.
 
Foraying into new sectors
Mawarid has has interests in healthcare, IT, security, technology, retail, manufacturing and telecom industries. "Now we're looking at investing in education, services and hospitality sectors in the next one year. We see now there are better opportunities in these sectors in the UAE," he said, adding that the group's "policy is always that it look for business which is up and running and the owners are there in the management. We go as an institutional investor to expand the business along with the owners because they have interests too. We don't involve in day-to-day affairs but we sit on the board to monitor financials and we make sure the company meets its target," Al Nuaimi added.
He predicted that 2017 results will be better than the previous year. "We are looking at 2017 to be better than 2016, thanks to continuous growth and recurring revenues. The investments that we made will contribute to our income and revenues, he added.
 
2017 turning points
Mawarid has joined hands with Fullgoal Asset Management (HK) to launch $500 million fund to invest in the Chinese equity market. "We are working with them for quite sometime to launch first Islamic fund to invest in Chinese stock market; we are in the stage of creating a Shariah board for the fund to analyse, assist and study all Chinese stocks shortlisted by Fullgoal. There are thousands of companies listed in China, but Fullgoal is going to select only those which are Shariah compliant. In the next few months, Fullgoal will identify the companies," Al Nuaimi told this newspaper.
Mawarid CEO said the first-half was steady for the financial sector but predicted that 2017 will see the beginning of the boom and a turning point for the economy as new projects will be launched to catch up with the Expo 2020 and 2021 when the country will mark its golden jubilee of independence. "I believe 2017 is a turning point where we see boom; first six months were steady but from June onwards we see lots of projects coming up to catch up with the time remaining in 2020 and 2021 which are important years for the UAE business community and financial sector," he noted. - waheedabbas@khaleejtimes.com