Abu Dhabi expects two IPOs by end of the year: CEO

At least 6-7 companies also intend to do secondary listing on the ADX

23/09/2014 02:25 AST

Abu Dhabi Securities Exchange (ADX) is in talks with four private companies for an initial public offering (IPO), out of which two may get listed this year, its chief executive said on Monday.

“We are expecting a couple of them before the end of this year … the pipeline is quite healthy,” Rashed A. Al Blooshi, chief executive officer at ADX said. He was speaking at the GCC and Africa Investors conference in Dubai.

The IPO market in the Middle East has been boosted with Emaar Malls Group’s IPO, which is intended to raise more than $1.5 billion (Dh5.5 billion). The company said last week that its institutional investors portion was already subscribed, pointing to robust investor appetite for the new share sale.

On late Sunday, Saudi Arabia’s capital market regulator approved IPO plans of National Commercial Bank, the country’s biggest in terms of assets.

At least 6-7 companies also intend to do secondary listing on the ADX, where trading of shares are allowed. This may pave the way for them to do primary listing after getting attuned to the corporate governance standards, he said.

The exchange head also said they are also promoting to get companies into retail, education, petrochemical and health care on the index.

“We thought these companies were missing in our index. We are aiming to see the sectors available on our index to reflect the real economy,” said Blooshi, adding the exchange is focusing on companies in retail, education, petrochemicals and health care. Bond trading

The exchange also plans to introduce its first bong listing, a move seen to boost more bond trading.

“We are technically ready … we will list bonds from the Abu Dhabi government before the end of the year,” said Blooshi, without giving any details.

The exchange also plans to boost its range of financial products to boost liquidity.

“Our strategy is to have more of financial products. We have ETF [exchange-traded fund] traded on the stock market. We want to have more of government bonds, sukuks. We are in final stages of listing of government bonds,” Blooshi said, adding, “we have decided to go to derivative markets. We have started to communicate to all stake holders on how to move forward on derivatives market.”

Power and control:

The exchange is also in talks with many family-owned businesses in the region to list on the exchange, but the challenges are many.

“We try to show them the value add of converting from private to public. The issue with the family is power, they say, ‘We have spent 30-40 years to start the company.’ They fear that they might lose power. Then we show them examples of IPOs in the GCC,” he said.

Blooshi said it was a matter of time and expects the family-owned businesses to take the first step very soon.

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