UAE FinTech MBME to list its shares on ADX next week

The UAE's MBME Group is to list its shares on the growth market of the Abu Dhabi Securities Exchange next week as part of its expansion plans.

MBME, a 100 per cent Emirati family business, said on Friday it will become the first FinTech company to list on the UAE's financial markets, on April 17.

MBME's platform offers payment collection and aggregation services to government and private sector entities, as well as retail customers. The company operates more than 4,000 touch points across the UAE, for 3.2 million customers.

The company said it “will deploy the proceeds of the capital increase to advance [its] global expansion and initiate horizontal and vertical integrations via product roll-outs and acquisitions”.

Demand for digital payments and other FinTech services has grown during the pandemic as more people use online banking services to transfer money and pay for e-commerce transactions.

Globally, digital payments are expected to grow to $8.26 trillion by 2024, from $4.4 trillion in 2020, according to Statista.

“Being listed will enable us to offer higher margin, innovative products and services to both new and existing customers in local, regional and global markets, while also advancing the development of market-leading proprietary technological know-how,” Ali Aldhaheri, chairman of MBME Group, said.

ADX, the Arab world's second-largest bourse with a market capitalisation of about Dh2.7 trillion ($735 billion), has experienced a rush of listings in recent years amid Abu Dhabi's plans to boost its capital markets.

Companies that listed on the bourse last year include Borouge, the Abu Dhabi Ports Group, Abu Dhabi healthcare provider Burjeel Holdings and Bayanat, a geospatial data products and services provider owned by artificial intelligence and cloud computing company G42.

Americana, the largest quick-service restaurant operator in the Middle East and Africa region, raised $1.8 billion from its IPO in November when it was listed on the Abu Dhabi and Saudi stock exchanges.

This year, Adnoc Gas and Presight AI, a G42 company focused on data analytics and artificial intelligence, were listed on the ADX.

Supermarkets operator Lulu and Pure Health, a unit of Abu Dhabi-listed International Holding Company, have also announced plans to list in Abu Dhabi this year.

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.”

UAE FinTech MBME to list its shares on ADX next week

The company will use the proceeds of the listing to finalise mergers and acquisitions