Shares of Damac Real Estate had a roller-coaster ride on its debut in Dubai yesterday.
The shares surged as much as 15 per cent as trade opened at Dubai Financial Market (DFM), before erasing almost all of their gains by the second half of the session. At the close, Damac stock was up 1.7 per cent at Dh2.84 each.
Despite the muted response, Damac outperformed the market. The DFM General Index closed down 0.6 per cent at 3,749.37.
“The name is trading at a discount compared to leading real estate companies in the UAE, and it is among the largest developers here,” said Sebastien Henin, head of asset management at Abu Dhabi-based The National Investor. “The stock may have performed better if not for current market conditions.”
Nabil Farhat, a partner at Al Fajer Securities in Abu Dhabi, agreed, saying that the timing of the listing was not the best, and the markets were experiencing volatility related to oil prices. But the company “offers investors a quality real estate developer with healthy margins and good future prospects”, Mr Farhat said.
In December, Damac offered investors a swap of their Global Depositary Receipts (GDR) on the London Stock Exchange into ordinary equity on the Dubai bourse.
The property developer is building a golf course designed by Tiger Woods, and villas that will be branded and operated by the New York-based Trump organisation.
Damac more than doubled its profits to US$224.3 million in the third quarter compared with $84.4m in the same period last year, according to the DFM website yesterday.
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