Shares in the UAE-based retail firm Lulu Group ended flat on their debut on the Abu Dhabi Securities Exchange on Thursday, after the company raised Dh6.32 billion ($1.72 billion) from its initial public offering, making it the country's largest listing so far this year.
Lulu, trading under the ticker symbol “LULU”, closed at its opening price of Dh2.04 after dropping to as low as Dh1.99 earlier in the day. It was the most traded stock on the ADX, with about 248 million shares exchanged by the closing bell.
The IPO, priced at the top of the range, was oversubscribed by more than 25 times across all tranches (excluding cornerstone investors) and received aggregate demand of more than Dh135 billion from local, regional and international investors.
Analysts attributed Lulu's weak trading debut to “price discovery” in the market.
“This trading pattern suggests an active price discovery process as market participants work to establish a fair value for the shares of this significant regional retailer,” Joseph Dahrieh, managing principal at UK-based broking firm Tickmill, told The National.
The price could continue to see some volatility as more investors interact with the stock, he added.
“Lulu’s addition to ADX’s growing portfolio reflects the UAE's strides in cultivating a robust, multi-sector economy,” said Ghannam Al Mazrouei, chairman of ADX. “As this year’s largest IPO in the UAE, Lulu drew incredible demand from a global investor base, solidifying ADX’s role as a premier gateway for capital flows.”
LuLu, one of the largest supermarket chains in the Gulf, founded by Indian-born businessman MA Yusuff Ali in 1974, operates more than 240 hypermarkets and shopping malls in 10 countries including India, Egypt, Malaysia and Indonesia.
The retailer is targeting a total dividend payout ratio of 75 per cent of annual distributable profits after tax, paid semi-annually. The company aims to pay dividends for the six months ending December 31 and in the first half of next year.
The listing will “provide an opportunity for local and international investors to benefit from the opportunity in our region and the growth and ambition of Lulu Retail”, said Mr Ali, Lulu’s chairman and managing director.
Lulu Retail plans to open an additional eight branches this year in the UAE, Saudi Arabia and Oman. It has opened 13 shops in the Emirates so far this year and aims to add about 19 in 2025, mainly in the UAE and Saudi Arabia, officials said last month.
The Abu Dhabi-based company expects up to 10 per cent revenue growth this year, its chief financial officer Prasad KK told The National. “The UAE is our main market and Saudi Arabia is our growth market. We are growing across the two markets,” he said.
Lulu’s revenue for the first half of this year grew 5.6 per cent annually to $3.9 billion, while its earnings before interest, taxes, depreciation and amortisation rose by 4.3 per cent during the same period.
“Our commitment to investing in growth is stronger than ever, evident in the opening of 16 new stores so far this year … we’re confident in meeting our guidance targets for 2024 and beyond,” said Saifee Rupawala, chief executive of Lulu Retail.
The Book of Collateral Damage
Sinan Antoon
(Yale University Press)
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.”
In-demand jobs and monthly salaries
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- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
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UAE'S%20YOUNG%20GUNS
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Skoda Superb Specs
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ENGLAND TEAM
Alastair Cook, Mark Stoneman, James Vince, Joe Root (captain), Dawid Malan, Jonny Bairstow, Moeen Ali, Chris Woakes, Craig Overton, Stuart Broad, James Anderson
500 People from Gaza enter France
115 Special programme for artists
25 Evacuation of injured and sick
Thor: Ragnarok
Dir: Taika Waititi
Starring: Chris Hemsworth, Tom Hiddleston, Cate Blanchett, Jeff Goldblum, Mark Ruffalo, Tessa Thompson
Four stars
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Five hymns the crowds can join in
Papal Mass will begin at 10.30am at the Zayed Sports City Stadium on Tuesday
Some 17 hymns will be sung by a 120-strong UAE choir
Five hymns will be rehearsed with crowds on Tuesday morning before the Pope arrives at stadium
‘Christ be our Light’ as the entrance song
‘All that I am’ for the offertory or during the symbolic offering of gifts at the altar
‘Make me a Channel of your Peace’ and ‘Soul of my Saviour’ for the communion
‘Tell out my Soul’ as the final hymn after the blessings from the Pope
The choir will also sing the hymn ‘Legions of Heaven’ in Arabic as ‘Assakiroo Sama’
There are 15 Arabic speakers from Syria, Lebanon and Jordan in the choir that comprises residents from the Philippines, India, France, Italy, America, Netherlands, Armenia and Indonesia
The choir will be accompanied by a brass ensemble and an organ
They will practice for the first time at the stadium on the eve of the public mass on Monday evening
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Monster Hunter: World
Capcom
PlayStation 4, Xbox One
Draw for Europa League last-16
Istanbul Basaksehir v Copenhagen; Olympiakos Piraeus v Wolverhampton Wanderers
Rangers v Bayer Leverkusen; VfL Wolfsburg v Shakhtar Donetsk; Inter Milan v Getafe
Sevilla v AS Roma; Eintracht Frankfurt or Salzburg v Basel; LASK v Manchester United
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
Total eligible population
About 57.5 million people
51.1 million received a jab
6.4 million have not
Where are the unvaccinated?
England 11%
Scotland 9%
Wales 10%
Northern Ireland 14%
