BNY Mellon and Emirates NBD sign deal to broaden foreign investors' access to UAE markets

Akash Shah, chief growth officer at BNY Mellon and Ahmed Al Qassim, group head of corporate and institutional banking of Emirates NBD, at the signing ceremony. Photo: BNY Mellon

Emirates NBD, Dubai’s biggest the bank by assets, and the US-based investment bank BNY Mellon have signed a partnership that allows international investors a greater access to the UAE and will help in further broadening the country’s capital markets.

The alliance will also provide Emirates NBD customers access to BNY Mellon’s global custody, asset servicing, data and technology capabilities, as it contributes it local market expertise to the deal, the companies said in a statement on Tuesday.

“Our strategic collaboration comes at a pivotal time of transformation in the UAE’s capital markets and is testament to Emirates NBD’s ongoing commitment to enhancing local market infrastructure,” said Shayne Nelson, group chief executive of Emirates NBD.

“The alliance brings Emirates NBD’s on-ground strengths … together with BNY Mellon’s global expertise as the world’s largest custodian to create a win-win proposition for regional and overseas investors alike.”

The UAE capital markets have seen a sharp rise in trading activity in the past two years, with significant rise in both the value and volume of trade on the Dubai Financial Market and the Abu Dhabi Securities Exchange amid continued economic momentum in the Arab world’s second-largest economy.

Foreign investor interest in the UAE markets has also increased with a series of listings both on the DFM and the ADX, the Arab-world’s second-largest bourse in terms of market capitalisation.

Dubai's Tecom Group, the operator of business districts that are home to more than 7,800 companies, last month raised Dh1.7 billion ($463 million) from its initial public offering on the DFM. It made it trading debut on Tuesday.

It follows the listing of the Dubai Electricity and Water Authority, which in April, raised Dh22.41bn from its IPO, the largest public float in the Middle East and Europe since Saudi Aramco's IPO in 2019.

Last year, Dubai announced plans 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.

Dubai’s toll systems operator Salik and retailer Union Coop have already announced plans to list on the Dubai bourse.

On the ADX, Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, closed its $2bn IPO in May, the biggest share sale on the bourse that was about 42 times oversubscribed.

Abu Dhabi Ports - $1.1 billion IPO in February 2022: AD Ports Group raised $1.1bn from its share sale to help expand its operations globally and boost growth. ADQ, one of the region’s largest holding companies, remains a majority shareholder in AD Ports Group with a 75.44 per cent stake in the listed entity. Reuters

Dewa became the first public entity to list on the Dubai Financial Market, raising Dh22.41bn in an oversubscribed share sale. The IPO of the Dubai utility in April was the largest in Europe and the Middle East since Saudi Aramco’s debut in 2019. It has a market value of about $39bn and is the largest on the exchange. AFP

Yahsat – $730.6 million in July 2021: a unit of Mubadala Investment Company, it raised about $731m from its initial public offering last July. It sold 975.9 million shares, or 40 per cent of equity, through the IPO, which was several times oversubscribed, with significant demand from both qualified institutional and retail investors in the UAE. Photo: Mubadala Investment Company

Adnoc Drilling - $1.1 billion IPO in October 2021: Adnoc Drilling’s share sale, oversubscribed more than 31 times, was the largest listing on the ADX, raising more than $1.1 billion. Adnoc maintains its majority 84 per cent stake in the company while US energy services company Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, has a 5 per cent stake, and US contract oil and gas driller Helmerich & Payne holds 1 per cent. Photo: Adnoc

Fertiglobe- $795 million in October 2021: a joint venture between Adnoc and Netherlands-listed OCI, raised about $795m in its initial IPO last year, amid strong demand from international, regional and local investors. The company — which is also the Mena region’s largest producer of nitrogen fertilisers by production capacity — sold more than 1.145 billion shares, representing 13.8 per cent of its share capital. Photo: Fertiglobe

The string of IPOs on the ADX also includes shares float of Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate that began trading in February.

In October, Fertiglobe raised about $795m from its listing, while Adnoc Drilling raise $1.1bn from its listing in the same month.

In July, Al Yah Satellite Communications, a unit of Mubadala Investment Company, raised about $730m through its public float.

The Emirates NBD’s and BNY Mellon’s partnership comes at “an opportune moment, with a number of local champions coming to market through the UAE’s IPO boom,” said Akash Shah, chief growth officer at BNY Mellon.

“Together, we will help create the infrastructure to capture long-term value from the UAE’s financial ecosystem, increase operational efficiencies and investor access.”

BNY Mellon currently works with a range of sovereign wealth funds, financial institutions, governments and other clients throughout the region. It offers asset servicing and ancillary services, corporate trust and treasury services to its clients.

The New York-based investment bank had $45.5 trillion in assets under custody or administration as of end of March this year, while its assets under management reached $2.3tn.

“BNY Mellon is proud to continue to build on our rich decades-long history in the Middle East and play an important role in enhancing the region’s vibrant market infrastructure with Emirates NBD,” said Robin Vince, chief executive-elect of BNY Mellon.