09/11/2014 06:49 AST
Amanat said its initial public offering raised more than Dh13.6 billion from investors, joining Emaar Malls Group as the UAE’s second recent heavily overscribed listing.
Amanat, an investment company, was looking to raise Dh1.37bn in funds to invest in health care and education, making its share sale nearly 10 times oversubscribed.
Dubai’s bourse is witnessing a flurry of new offerings after the Dubai Financial Market General Index jumped 107.7 per cent last year.
Emaar Properties’ IPO last month of its retail unit, Emaar Malls Group, was also hugely oversubscribed. It initially sought to raise US$1.58bn but collected $80bn from investors. Marka, a greenfield company looking to invest in retail and hospitality, raised Dh275 million in the summer and listed on the Dubai Financial Market (DFM) on September 25.
“With respect to these companies — Marka, Emaar Malls Group and Amanat — they add a value to the stock market and its investors because they represent new sectors that weren’t represented or that investors did not have access to before,” said Nabil Farhat, a partner at Al Fajer Securities.
Emaar Malls Group, the company that owns The Dubai Mall, listed on the DFM on October 2.
“Emaar Malls is already established. There’s already assets, revenues and historical performance,” said Mr Farhat.
Amanat said it should list on the DFM late this month.
“Marka and Amanat are new ones,” said Mr Farhat. “Their future success will be determined on their ability to implement their vision in buying and increasing money on these assets and improving shareholder value.”
The Abu Dhabi Securities Exchange General Index is up 11.6 per cent so far this year, while the DFM benchmark is up 30.7 per cent over the same period.
Retail, a thriving sector in the UAE, is new in terms of representation on the bourses. The overwhelming majority of companies listed on the DFM and the ADX are property developers, insurance firms and banks.
IPOs almost ground to a halt after the 2008 global financial crisis when the Dubai equity benchmark lost more than 50 per cent of its value in 2009.
The ADX welcomed Insurance House and Eshraq Properties in 2011. In Dubai, a planned IPO of Axiom Telecom in 2010 was cancelled at the 11th hour, meaning that Marka’s listing this year was the emirate’s first since the financial crisis.
Many more firms opted for London listings as liquidity dried up and investor appetite waned in the local bourses in the wake of the crisis.
NMC Health and Al Noor Hospitals Group both listed on the London Stock Exchange in 2012. Also that year, Abu Dhabi Capital Management decided to list one of its funds on London’s Alternative Investment Market.
Mr Farhat said Amanat’s oversubscription was somewhat distorted nd that the rash of huge listings was roiling markets.
“With regards to the oversubscriptions, it’s obviously exaggerated by the leverage they get from the banks, but still it shows investor interest in the new IPOs,” he said. “Too many IPOs in such a short time are affecting the market, and that’s why there has been so much volatility recently.
“We need smaller IPOs to encourage small businesses if they have innovation and good ideas, somewhere in the Dh200 million range. We don’t need Dh4bn and Dh10bn.”
The National
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