Some are using public transport, while car rentals have reported a 30 percent increase
uae17 hours ago
Dean Fernandes was one of the first people to sign up for the initial public offering (IPO) of Dubai’s road toll-operator Salik when it was announced in 2022. He invested a little over Dh2,000 in the shares and now, they are valued at roughly Dh3,300.
A longtime resident of Dubai, he knew that the shares were going to be a winner. “As soon as I heard that the IPO was going to be announced, I knew I wanted to buy it,” he said. “I am very happy with my purchase. I can only see the share value rising steadily.”
Dean is one among thousands of UAE residents who subscribed to the IPO of Salik and are now counting their gains. Upon debut, the shares climbed 20 per cent above its listing price. Last month, when it was announced that two new toll gates would be established in Dubai, the share prices climbed a further 35 per cent.
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“To be honest, I am very happy about the new toll gates,” Dean said. “I don’t use those routes so it doesn’t really add to my spending, but I think it will definitely drive the share prices higher. I think it is one of the best investments I had made.”
For A. Iqbal, the decision to buy the IPO happened by chance. “I was skeptical but my teen daughter reasoned that it would be a good investment,” he said. “We had a discussion and she said that with thousands of cars using Salik every day, the chances of the share values going down were very limited. I thought she had a fair point and decided to invest.”
Salik officially opened its IPO subscription in September 2022 and raked in over Dh184 billion — being oversubscribed 49 times.
He put in an initial bid of Dh5,000 but had to settle for Dh2,000 worth of shares due to the oversubscription. “I knew that the IPO would garner interest as Salik is something so commonly used,” he said. “However, I didn’t think it would be as popular as it became.”
As someone who uses Sheikh Zayed Road every day for his commute to work, Iqbal sees the new toll gates as a double-edged sword. “I am assuming the shares will go up but so will my expenditure,” he said. “I will have to pay roughly Dh24 per day while going to and coming from office.”
Youngster Navya Muraly also bought the Salik shares when the IPO was announced but she is not convinced the new toll gates will ease traffic.
“I believe that months from now, because of the new toll gates, we can anticipate a rise in taxi fares and we have to cope with additional expenses that might arise,” she said. “This is not ideal considering companies are not even increasing salaries.”
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However, she admitted that she hoped to reap the benefits of her shares. “The prices in the market have been so promising so far. With two more gates being introduced, I am hoping we get higher returns in the form of dividends. However, as we all know the market is always fluctuating, this factor can always change but since this is a semi-government owned company. I don’t see it falling beyond a certain price.”
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