The Dubai Electricity and Water Authority’s (Dewa) initial public offering (IPO) is seeing strong demand and UAE’s stock markets have a healthy pipeline of IPOs, senior government officials said on Monday.
“We see a lot of interest around Dewa IPO and it is one of 10 government entities to be floated. In addition, many privately-owned companies have started the process and we see a healthy pipeline. This means a greater depth of capital markets and better governance,” said Helal Al Marri, director-general, Dubai Department of Economy and Tourism.
Dewa launched its IPO on Thursday to raise up to Dh8.06 billion and will list on Dubai Financial Market next month and set an indicative price range between Dh2.25 and Dh2.48 per share. A total of 3.25 billion shares, equivalent to 6.5 per cent of Dewa’s existing shares, will be offered, with the selling shareholder reserving the right to increase the size of the offering.
The Dubai government has announced that it will float 10 entities on the Dubai Financial Market to increase market capitalisation to Dh3 trillion.
A strong response to Dewa’s IPO will further boost investor confidence for the other IPOs that will come later on in the local bourse.
Al Marri added that the UAE will become a very strong regional hub that surpasses the regional countries in three years as regional companies increasingly looking to move to UAE because investors understand the risk they are taking. "We are positive about the IPO market and the capital market outlook,” added Al Marri.
Mohammed Al Shorafa, chairman of the Abu Dhabi Department of Economic Development, said capital markets are an important pillar now of Abu Dhabi’s growth strategy.
He projected that over a dozen companies are in the pipeline to list on the Abu Dhabi Securities Exchange.
“Abu Dhabi stock market cap is now about Dh1.6 trillion and we have another 15 companies in the pipeline. We created the new IPO fund also to assist family companies,” he said, adding that the UAE government is very progressive which helps bring companies to come to UAE and list on the local markets.
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