"A number of family businesses from the UAE and the region headed by a new generation management are keen on raising money through initial public offerings (IPOs). With flexible listing options, DIFX is an ideal market for many of these companies," said David Hodgkinson, Deputy Chairman and Chief Executive Officer of HSBC Bank Middle East.

Last week HSBC announced its intention to relocate their regional investment banking headquarters to Dubai International Financial Centre (DIFC) in the first quarter of next year.

DIFX regulations allow family businesses to go public by listing a minimum of 25 per cent of its share capital. Companies are also allowed to decide their share price themselves. The existing UAE laws on listing makes it mandatory for private companies to offer a minimum of 55 per cent when they go public and the pricing of an issue involves a complex formula regulated by the regulatory authority and the government. The substantially lower threshold limit for listing is expected to attract more family business.

HSBC with about 60 years of presence in the UAE has a strong rapport with the leading business families. Such long association and comfort levels are considered a strong plus in favour of HSBC in persuading some of the business families to go for IPOs.

"We are in talks with a number of companies for potential listing on DIFX. There are several of them who have shown keen interest in getting listed," said Hodgkinson without giving specific numbers of companies that have shown interest in listing their shares on DIFX.

HSBC's move, to locate its investment banking, its Corporate, Markets, Islamic Finance division HSBC Amanah, and HSBC Private Bank to DIFC, according to market observers has come as a shot in the arm for DIFC and DIFX. "The commitment by a bank of HSBC's stature   is a sure vote of confidence in DIFC. For DIFX, which has a single listed stock and negligible trading since its opening two months ago, the entry of internationally reputed investment banker with strong presence is reassuring," said the CEO of an international bank.

Investcom, the first and only listing on DIFX is yet to trade any significant volume. "The market is very new and the trading is yet to pick up. It is possible that investors are keen to hold on to their shares for some time," said a DIFX official.

DIFC and DIFX officials admit that the market is very new and it needs to educate the investors to be active on the market. "Our trading systems and procedures are completely new to the people who are used to the local markets. I think we need to be proactive in educating the investors on the benefits of trading on DIFX," Dr Omar bin Sulaiman, Director General of the DIFC Authority.