Secondary listings on ADX elicit growing interest from firms

The ADX Growth Market, with a market cap of Dh62 billion, recorded a ‘robust performance’ in 2021 with the value of shares traded exceeding Dh16 billion.

Secondary listings on Abu Dhabi Securities Exchange (ADX) are generating increased interest among private and Emirati family businesses because of the bourse’s new regulations, according to a leading developer.

Abu Dhabi bourse’s new regulations attract more international investors, enhance fair price discovery, and improve transparency and disclosure levels, according to Dr Faisal Ali Mousa, chairman of Fam Holding, a Sharjah-based leading real estate developer in the UAE. Fam Holding will shortly list on Abu Dhabi’s ‘Second Market’ which has recently been rebranded as the ‘Growth Market’.

The ADX Growth Market, with a market cap of Dh62 billion, recorded a ‘robust performance’ in 2021 with the value of shares traded exceeding Dh16 billion, while the total number of companies listed on the market increased to 13.

ADX comprises two markets. The main market is where investors buy and sell securities they already own after the company has sold its offering on the primary market; while ADX’s second market (Growth Market) is part of the existing infrastructure of ADX to list private companies where investors are able to buy and sell securities of private companies.

The Growth Market, which replaced the Second Market — established in 2014 — offers companies access to a wide investor base, key support from the ADX on investor engagement, and an opportunity to enhance their brand equity. The market will enable companies to begin their capital markets journey with companies able to directly list shares on the exchange, without the need for an IPO. This ecosystem is structured to help them boost their growth while gaining the experience of having their shares being publicly traded along with the wider associated benefits such as access to capital and funding, enhanced governance, and increased liquidity for shareholders.

Fam Holding will be capitalising on the listing wave in the second-largest stock market in the Middle East, allowing it to embark on a growth phase that will transform it into a bigger and more international player in the real estate business.

Founded in 2009, the property developer owns an investment portfolio worth Dh2 billion and 5,750 residential apartments in the UAE.

"Listing in ADX Growth Market is a wise option for private and family companies with strong positions and significant growth potential as it allows them to develop their activities and businesses faster, in preparation for listing in the primary market at a later stage," said Ali Mousa.

In response to the increased number of private and family businesses seeking to list their shares on the market, the secondary market of the UAE has seen tremendous momentum recently, he said.

It comes as a result of the financial market's efforts to expand investment opportunities by increasing the number of publicly listed companies and providing more options for investors, he added.

Following its conversion into a private joint-stock company with a capital of Dh50 million and receiving initial approval to list on the ADX, Fam Holding announced plans to list its shares on the ADX's growth market. — issacjohn@khaleejtimes.com

• Dubai