The Dubai stock exchanges will showcase their recent spectacular performance for global investors as the emirate’s latest international roadshow hits London.
Dubai Financial Market and Nasdaq Dubai are bringing representatives of their 14 biggest companies to the biggest market in the European trading zone with the message – there is more to come.
Essa Kazim, the chairman of Borse Dubai, which owns both markets, will lead the delegation. “We have a good story to tell, so why should we not brag about it? The indices are among the best performing in the world, but we still want to encourage more institutional investors,” he said.
“We have a very positive presentation, with the forthcoming upgrade to emerging market status, the growth of the investor-relations profession, increased liquidity and of course the rising value of shares. We have the best performance in the world recently and we want to highlight that. In the current economic climate for the UAE there is no reason it should not continue.”
The two-day event will take place in the City offices of Goldman Sachs, the investment bank that is acting as roadshow co-ordinator. Dubai executives will make one-to-one presentations to potential investors in a process likened by one participant to “investment speed dating”. There will also be general presentations on the state of the Dubai economy and investment climate.
Some of the biggest names on the Dubai markets are taking part, such as Emaar Properties, DP World, Emirates NBD, Dubai Islamic Bank, Shuaa Capital and Mashreq.
London investors will be keen to hear from Emaar of any new information regarding its intention to list shares of its malls business in Dubai and London, as the company recently announced.
Mr Kazim said he would also highlight the strong performance of the DFM itself, which is the only regional market to be listed on a stock exchange. Last week it announced a near-700 per cent rise in profits to Dh215 million in the first three months of this year.
The roadshow takes place amid sharply increased international interest in UAE markets. “We deeply believe that the mounting presence of international investments and particularly institutional ones will further augment the position of our markets globally,” said Mr Kazim.
“Foreign investors accounted for 42.8 per cent of DFM trade value in 2013, with net inflow of Dh1.7 billion. The total trade value jumped 229 per cent to Dh159.9bn last year,” he added.
At the same time, institutional investors are becoming increasingly interested in the retail-oriented DFM, now accounting for 25 to 30 per cent of business, Mr Kazim estimated. “We want a better balance between retail and institutional investors,” he said.
Further international interest in regional markets is expected ahead of the inclusion by the index complier MSCI on the emerging markets index.
Still, some money managers have questioned whether stock valuations have run ahead of themselves. BlackRock, the world’s biggest asset manager, said in February it was beginning to see signs of speculative excess in UAE stocks. The Dubai index has a price-to-earnings ratio of 21.3, compared with 15.6 for Abu Dhabi and 11.7 for the MSCI emerging markets gauge.
Deutsche Bank recently estimated that because of rising value, increased liquidity and a willingness by regional companies to raise the limits on foreign ownership, more companies than previously thought would now achieve emerging market status.
The bank now expects 15 stocks from Qatar and 12 from the UAE to be included in the list when it is announced in June. New possible entrants from the UAE include Dubai Islamic Bank, Union National Bank, Dubai Investments and Union Properties.
Other UAE companies likely to be selected for inclusion, according to Deutsche, are: Emaar, National Bank of Abu Dhabi, First Gulf Bank, DP World, Abu Dhabi Commercial Bank, DFM, Aldar Properties and Arabtec.
fkane@thenational.ae
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