It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
Analysts believe the strong showing by Dubai Islamic Bank (DIB) stocks yesterday, the opening day of its real estate unit's IPO, may signal the end of a prolonged slump due to weak market sentiment evident in the lacklustre performance of some recent IPOs, including Air Arabia's.
Lifted by DIB shares, the DFMGI index gained 3.57 per cent yesterday, its sharpest rise since September 11, 2006.
P. Krishna Murthy, CEO, Financial Services Division of the Al Rostamani Group, said yesterday's stock market rally and the gains by DIB may be indicative of an IPO which could be reasonably oversubscribed. Deyaar, an existing profit-making company, recorded a net profit growth of 193 per cent to Dh412 million and top line growth of 128 per cent. Deyaar's subscription, open to UAE and GCC nationals, are being offered at a price of Dh1 per share in addition to 0.02 fils as offering costs.
He said the relatively lukewarm response to the Air Arabia IPO, oversubscribed by only 1.5 times, underscored the negative investor sentiment in the wake of a huge capital exodus of over $460 billion last year from the regional markets. "When compared to certain other IPOs that were oversubscribed by several hundreds of times, Air Arabia's IPO can never be termed successful," he said. He pointed out that Tamweel's IPO was 484 times oversubscribed and DFM issue by 300 times. "Not so long ago, GCC market witnessed the craze for IPO and the memory is still fresh when we heard about gate crashing, street fights during Dana Gas IPO."
Murthy said one of the fundamental causes for poor response to the Air Arabia IPO issue, which opened on March 18, was the low investor sentiment as investors have lost huge money in the secondary markets due to significant market corrections in the past one year.
UAE stocks lost more than $7.5 billion or 5.3 per cent in market capitalisation in Q1 2007. Despite companies handing out cash and share dividends worth $5 billion, capitalisation on the Dubai bourse fell by $5 billion and by $2.5 billion in Abu Dhabi. Last year, UAE market cap nosedived by 70 per cent compared to 60 per cent decline in the Gulf region.
Murthy said Deyaar's fundamentals are strong. It is a Shariah-compliant company with 24.6 million square metres area for sale. Proceeds from its IPO will be used to finance the company’s massive expansion in property development in a series of mega projects in the UAE as well as spearhead its growth in key strategic markets of Saudi Arabia, Qatar, Kazakhstan and India.
Deyaar, a wholly-owned subsidiary of Dubai Islamic Bank, is one of the region’s leading real estate players, with over 17 residential and commercial projects across the UAE, Turkey and Lebanon.
It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
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