Damac Properties to stop trading on DFM from February 15 amid continued losses

Shares of property developer Damac Properties will stop trading on the Dubai Financial Market from February 15 after a notice period to take the company fully private ended on Monday.

Maple Invest, a vehicle fully-owned by Damac’s founder Hussain Sajwani, submitted a notice in December for the mandatory acquisition of all its shares and the period specified for objections from current shareholders has expired, the developer said in a statement to the DFM.

“As of today … neither Damac nor Maple has received any objection to the mandatory acquisition."

“Damac will instruct the DFM to suspend trading of its shares with effect from Tuesday, February 15, 2022 and all remaining Damac shares (not already held by Maple) will be re-registered in the name of Maple in Damac’s share register as of February 20," it said.

Maple submitted the offer to take the company private by acquiring its entire issued and paid-up ordinary share capital in October, after Damac's board unanimously recommended its minority shareholders accept the founder's offer.

Mr Sajwani, who owns 72 per cent of the Dubai company, said in June that he would buy the remaining shares of Damac for Dh1.3 per share for a total consideration of $595 million.

The move comes as the developer struggles to remain profitable amid tougher property market conditions during the pandemic-induced slowdown and preceding softness on the back of lower oil prices.

On Monday, the company said it narrowed its net loss for the 2021 financial year to Dh531m ($144.6m) from Dh646m recorded a year earlier.

Total revenue for the reporting period fell to Dh3 billion from Dh4.7bn reported at the end of 2020, it said in a separate regulatory filing.

Booked sales performance, however, improved at the end of 2021 to Dh7.8bn against Dh2.3bn it reported in 2020, as the company launched new development projects such as Cavalli Tower, a 70-storey skyscraper overlooking Palm Jumeirah and a new master community development Damac Lagoons.

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Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.

It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.

Edge has an annual revenue of $5 billion and employs more than 12,000 people.

Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Our legal columnist

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Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

Key findings of Jenkins report

Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."