Dubai offers incentives to encourage new stock market listings

Incentives from DFM include support prior and post listing on the local bourse and a three-year waiver on fees

Dubai is looking to boost its stock market and attract more listings as it seeks to tap into a growing appetite for IPOs in the region. Pawan Singh / The National

The Dubai Financial Market unveiled an incentives programme to encourage new initial public offerings (IPOs) and listings from private sector companies in key economic sectors that contribute to the country's gross domestic product.

The incentives include financial support to the cost of private companies’ IPOs on the DFM’s Main Market and listing on the Second Market, post-listing support through participation in its international roadshows regionally and globally, and a three-year waiver on listing fees, AGM fees and dividend distribution fees, the DFM said in a statement on Tuesday.

“Dubai is home to an unparalleled portfolio of regional and international private companies. Attracting new IPOs will provide DFM’s global network of investors from over 208 nationalities with new investment opportunities,” said Hamed Ali, chief executive of DFM and Nasdaq Dubai.

The emirate is looking to boost its stock market and attract more listings as it seeks to tap into a growing appetite for IPOs in the region.

The DFM's announcement is in line with the government's efforts to strengthen Dubai’s position as a global capital markets hub, which included the launch of a Dh2 billion ($544m) market maker to attract listings from sectors such as energy, logistics and retail, and a Dh1bn IPO support fund to encourage tech companies to list on Dubai's stock markets.

This month, the emirate announced that it plans to list 10 government and state-owned companies on the DFM as part of a broader strategy to double the financial market's size to Dh3 trillion.

The Dubai Water and Electricity Authority will be the first government entity to list on the DFM, followed by the road toll system Salik, said Sheikh Maktoum bin Mohammed, Deputy Prime Minister and Minister of Finance.

The toll system “is successful and investing in it holds great opportunities. The goal is to diversify the government companies that we list in the market in order to achieve the best return for investors within our markets”, he added.

The DFM's latest initiative is aimed at a number of key and rapidly growing economic sectors, including technology, transport and logistics, as well as health care, pharmaceutical, manufacturing and agricultural technology.

“The new incentive programme stems from our commitment at DFM to become a platform that accelerates the growth of the private sector and to mirror Dubai’s success as a world-class base for leading businesses regionally and internationally,” Mr Ali said.

In August, the DFM, along with the Abu Dhabi Securities Exchange, waived the minimum commission fee on the trade of all listed securities, a move meant to boost trading by smaller investors, add liquidity and increase volumes to these trades.