About 10 UAE companies are preparing to list on stock exchanges in spite of recent market volatility, according to a top Securities and Commodities Authority (SCA) official.
Obaid Al Zaabi, the deputy chief executive at SCA, said that recent volatility had led several companies to delay their plans, but that most were expected to continue to pursue listings when markets stabilised.
“The current situation of fluctuating markets may delay or prevent some of them from completing the relevant procedures,” Mr Al Zaabi told The National on the sidelines of the ongoing Arab IPO summit in Dubai.
“But I think by the end of this quarter the market will be in better shape and will be ready to welcome new IPOs.”
Companies seeking to list were split evenly between those looking to list in Dubai and Abu Dhabi, and included both start- up and existing companies, said Mr Al Zaabi, declining to name any of them.
A significant rush of IPOs is unlikely to occur before the start of next year, according to Ahmed Ibrahim, the head of equity capital markets at Al Tamimi & Company in Dubai.
“Everyone’s sitting back and waiting for the right time, I don’t imagine anything will happen this year,” said Mr Ibrahim, who is working with four companies looking to list in Dubai.
“The right window for listing will be when the market becomes more stable, once there’s more predictability. Right now there’s a lot of fog around and not much visibility.” Dubai and Abu Dhabi’s headline indexes have declined by 23.7 and 7.7 per cent, respectively, over the past 12 months.
Dubai’s Daman Investments announced plans in November to list on the Dubai stock exchange, selling shares equivalent to a 55 per cent stake in the company.
Daman confirmed in June that it was committed to the IPO process, declining to say when it would list.
Damac Properties was the most recent company to list on the Dubai stock exchange, after shareholders voted to convert global depositary receipts listed on the London Stock Exchange into shares listed in Dubai.
The UAE’s new Companies Law, which came into effect in March, provides greater encouragement for companies to list on local markets.
Provisions of the new law include a reduction of the minimum free float to 30 per cent of a company’s capital from 55 per cent previously, and a streamlined bookbuilding process.
Mr Al Zaabi said that the SCA was finalising the relevant implementing regulations relating to listings, and expects them to be published by the end of the year.
jeverington@thenational.ae
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