The listing of 11 companies on the UAE capital markets this year will raise more than Dh8 billion ($2.18 billion), the deputy chief executive of the Securities and Commodities Authority has said.
Four free-zone entities and two special purpose acquisition companies (SPACS) are in the listing pipeline in 2023, Mohamed Al Hadari said in his address at the Mena IPO Summit on Tuesday.
“While 2021 was a year of recovery, 2022 and 2023 will see significant growth and development in the local markets and IPO markets,” he told delegates in Dubai.
The increase of initial public offerings in the UAE will boost the liquidity of local capital markets, attract more retail investors and improve trading efficiency, he said.
“It will also make the UAE markets even more attractive to foreign investors, who are investing in the future of one of the best-performing economies in the world,” Mr Al Hadari added.
The UAE and the wider GCC region have witnessed a string of IPOs amid strong investor demand as economies rebound at a quicker pace from the coronavirus-induced slowdown and liquidity has been shored up by high oil prices.
Overall, 12 companies in the UAE listed last year, raising $11 billion, in addition to the joint Abu Dhabi-Riyadh listing of Mena food franchisee Americana, which reaped $1.8 billion.
In Abu Dhabi, Borouge, there is the joint venture between Adnoc and Austrian chemicals producer Borealis; Abu Dhabi Ports Group and healthcare provider Burjeel Holdings listed shares on Abu Dhabi Securities Exchange.
Bayanat, a geospatial data products and services provider owned by Abu Dhabi-based artificial intelligence and cloud computing company G42 also listed its shares on the emirate’s bourse in last quarter of 2022.
The momentum of IPO activity in Abu Dhabi last year was an extension of 2021 when the ADX received nine listings including Adnoc Drilling, Fertiglobe, Alpha Dhabi and Yahsat.
The pipeline in the emirate is strong as Abu Dhabi’s Dh5 billion IPO Fund has shortlisted six private sector companies to potentially receive investment and advisory services for listing their shares on the ADX.
It is also in discussion with 30 other companies to list on the capital’s stock market, Mohamed Al Shorafa, chairman of Abu Dhabi Department of Economic Development told The National in November.
Dubai was the centre of regional IPO activity last year as investor confidence grew, buoyed by a strong economic rebound from the pandemic-induced slowdown and high oil prices.
The March listing of Dubai Electricity and Water (Dewa) was the largest GCC IPO in 2022, raising $6.1 billion. The offering size was more than doubled to 8.5 billion shares amid strong investor demand.
From the private sector, schools operator Taaleem also listed its shares in Dubai, after raising $205 million from its public offering in November.
“The current flurry of activity is more sustainable than previous IPO booms as it is part of a wider, well-defined government strategy to expand and diversify the market,” Mr Al Hadari said.
In November 2021, Dubai announced plans to bolster the size of its capital markets, with intentions to list 10 state-owned companies and boost the size of the emirate's financial market to about Dh3 trillion.
The emirate also announced a Dh2 billion market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.
The IPO pipeline of Dubai’s state-owned companies will continue to mature this year. However, the Dubai Financial Market is more focused on bringing private sector companies to the exchange, Hamed Ali, chief executive of the exchange said.
It is particularly pushing for listing companies from sectors of the emirate’s economy that are “under-represented on the exchange”, he said.
“For us, the private sector is the top priority,” he told delegates on Tuesday.
The market capitalisation of the DFM today presents a “huge opportunity to mimic” GDP of the emirate, which is far more diversified, than the market itself, he said
The exchange is going the extra mile to support companies from those sectors “in their journey to transform, through financial incentives and wavers,” Mr Ali added.