DFM posts 42% rise in 2022 net profit on revenue boost

The bourse had five IPOs last year amid Dubai's push to become a hub for capital market activity

Empower's bell-ringing ceremony at the Dubai Financial Market. The emirate accounted for 40 per cent of IPO activity in the Gulf region last year. Pawan Singh / The National

The Dubai Financial Market has reported a nearly 42 per cent increase in its 2022 net profit after revenue rose in a year characterised by strong market activity, with five initial public offerings.

Net profit for the 12-month period ended December stood at Dh147.1 million ($40 million), compared with Dh103.8 million in 2021, the DFM said in a bourse filing on Tuesday.

Total income grew by nearly 19 per cent to Dh354.6 million last year as trading commission fees rose more than 19 per cent to Dh200.4 million, the filing said.

“2022 has been a promising year for DFM,” said chairman Helal Al Marri.

The results highlight “the profound progress we are making in transforming our business, pursuing new opportunities and accelerating the development of UAE capital markets”, he said.

Trading value on the bourse increased by 24.5 per cent annually to Dh90 billion and the market capitalisation of listed securities increased by more than 41 per cent to Dh582 billion.

The DFM General Index also advanced by 4.4 per cent.

In November 2021, Dubai announced plans to list 10 state-owned companies and boost the size of the its 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.

Four of the announced 10 state-owned enterprises were listed on the DFM last year.

The March listing of the Dubai Electricity and Water was the largest IPO in the GCC region in 2022, raising $6.1 billion. The offering size was more than doubled to 8.5 billion shares amid strong investor demand.

State-owned Salik, Empower and Tecom collectively raised $2.2 billion in June, September and November, respectively.

From the private sector, schools operator Taaleem raised $205 million from its IPO in November.

Last year, Dubai accounted for 40 per cent of IPO activity in the Gulf region, Sheikh Maktoum bin Mohammed, Deputy Prime Minister and Minister of Finance, and Deputy Ruler of Dubai, said this month.

Mr Al Marri said the financial free zone's focus on its capital markets development strategy had “borne fruit, making DFM one of the most active markets globally for new IPOs and listings, with the successful listing of five IPOs for leading government-related and private companies”.

In November, the DFM also launched a new general index along with eight sectoral indexes, as well as a Sharia index to provide market participants with viable and tradeable benchmarks.

S&P Dow Jones Indices will act as the calculation agent of the new indexes.

“DFM has also intensified its efforts to diversify asset classes with the introduction of trading in crude oil contracts [Micro Oman Crude Oil Futures] and the launch of new equity futures, strengthening its position as one of the leading regional markets in terms of diversification of investment opportunities and asset classes,” Mr Al Marri said.

Over the past year, DFM recorded 167,332 new investors, up 23 times annually, bringing its total investor base to more than a million from 212 countries.

Foreign investors accounted for nearly 49 per cent of DFM’s trading value last year, with net purchases amounting to Dh5 billion. Their share of the market capitalisation was 19 per cent at the end of the year.

The board has recommended the distribution of a cash dividend of Dh134.7 million, equivalent to 1.68 per cent of the capital and 100 per cent of the total retained earnings available for distribution, the DFM said.

It will also submit a recommendation to the annual general meeting to adopt a new fixed dividend policy, stipulating that the company annually distributes a minimum of 50 per cent of its net profit as opposed to the current practice of cash dividend every two years, it said.