Union Coop to become first UAE retail co-operative to list on DFM

Trading on the Dubai bourse will begin on July 18 and its share price will be determined on the first day

A Union Coop branch at Etihad Mall in Dubai. Reem Mohammed / The National

Union Coop is set to become the first UAE retail co-operative to list its shares on the Dubai Financial Market later this month, as part of the emirate's strategy to encourage more local public initial offerings and boost the strength of its bourse.

The company will suspend trading of its shares through its own portal as of Friday, July 1, it said on Friday. Trading will resume on July 18 through the DFM, with the share price set to be determined on the first day of trading.

Union Coop will exercise a share split on a ratio of one to 10, with each member receiving 10 shares for every one share they currently own. All members will need to have a DFM investor number and set up a trading account to access their shares, the company said.

“The listing of Union Coop shares on the DFM will represent a key milestone in its development journey, as it provides our members with an efficient, regulated and transparent marketplace for trading of their shares," said chief executive Khalid Al Falasi.

"It also enables us, as a listed Union Coop, to leverage the numerous benefits of capital markets to implement our growth strategy and provide our members with ... innovative [DFM] services such as the seamless cash dividend distribution."

Union Coop has been expanding its operations and had 23 branches and four malls as of 2021. The retailer posted a 2.6 per cent increase in its 2022 first-quarter net profit to Dh116.5 million ($31.7m) while net profit for 2021 stood at Dh413m.

The UAE announced in February that it would permit the listing of co-operative societies on the country's capital markets as part of plans to widen the pool of investors and boost liquidity.

The decision, which was approved by the Cabinet in May, will "attract strategic partners and introduce new forms such as digital and financial co-ops”, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said at the time.

“Co-operatives are a successful economic model that can be built upon and developed.”

Dubai also announced plans last year to list 10 state-owned companies as part of its strategy to double the size of its capital market to Dh3 trillion and attract foreign investment.

The emirate also unveiled plans to set up a Dh2 billion market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

The Dubai Electricity and Water Authority — which operates as a vertically integrated multi-utility, with business activities including electricity generation, transmission and distribution, water desalination and district cooling — was the first government entity to list on the DFM.

The utility, which listed shares in April in the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019, raised Dh22.41bn from its initial public offering.

Earlier this week, Dubai's Tecom Group, the operator of business districts that are home to more than 7,800 companies, raised Dh1.7bn from its IPO on the DFM.

The IPO was 21 times oversubscribed, with total gross demand at more than Dh35bn. Tecom's shares will begin trading on the Dubai stock exchange on July 5.

"This imminent listing [of Union Coop] underlines the joint efforts between the DFM and various economic sectors in Dubai to accelerate the implementation of Dubai’s strategy to develop its financial markets," said Hamed Ali, chief executive of the DFM and Nasdaq Dubai.

"We are persistently working under the direct supervision of the Supreme Committee for the Development of Financial Markets to achieve the strategic objectives and strengthen Dubai's leading position as a global capital markets hub by the creation of [a] highly efficient, transparent, diversified and deep financial marketplace.

"We are pleased to welcome the first listing by a retail co-op in the UAE, as the emergence of a promising prospects for listing of more co-operatives in the future."