Marka shares soar on Dubai bourse debut

Upmarket retailer emerges from hectic DFM debut with good returns for investors.

Essa Kazim, centre, chairman of Dubai Financial Centre, and Jamal Al Hai, centre right, chairman of Marka, at the Marka listing on the Dubai Financial Market. Antonie Robertson / The National

Investors in Marka, the upmarket retailing and hospitality company, were able to book a near 60 per cent profit on a hectic first day’s trading in the stock on the Dubai Financial Market.

The shares – the first to be listed on Dubai’s main market since 2009 – closed at Dh1.59 yesterday, compared with a regulator-set opening price of Dh1.

Jamal Al Hai, the chairman of the company which has some of the UAE’s biggest business names on its share register, said: “We want to see the price go even higher.”

But the listing was a roller coaster ride for many investors, and was affected by brokerage problems in the early part of trading. The shares rose to touch Dh2 at one stage, in heavy trading volume, before easing back to trade for a long period at Dh1.77.

At that level, some investors decided to take profits, leaving the shares at Dh1.59, valuing the company at Dh795 million. Some 118 million shares were traded by the close – a high turnover for the DFM – representing Dh201m worth of transactions.

Trading was heralded by a countdown and bell-ringing ceremony at the DFM led by Essa Kazim, the DFM chairman and chief executive.

Mr Al Hai added: “This shows that the market is still healthy and that we announced the initial public offer at the right time. We expect a good future for the whole company.”

Marka is a “greenfield” IPO, meaning it has no trading track record or substantial assets. These have been rare in UAE markets, but Marka’s business strategy and top-notch investors attracted big interest from the moment the company was formed earlier this year. Its first offering of shares on incorporation was 36 times oversubscribed.

Mohammed Ali Yasin, managing director of NBAD Securities, said: “It was a very good first day’s trading, volatile between highs and lows, but we expected that. There were some technical difficulties with some of the brokers at the beginning, but these were quickly ironed out.

“When trading began, there were some offers to sell at Dh4, which wasn’t realistic. Then when it stabilised for a while at Dh1.77, some investors decided to take profits.

“I think Dh1.59 is still quite high, it’s a really handsome return in one day and the temptation to take profits will continue to be strong. It will take another couple of days to settle down but then of course we have another big IPO coming next week with Emaar Malls. We need to get that out of the way to see the real state of UAE markets.”

Marka is focused on the sports, hospitality and fashion segments of the retail business, and has signed global superstars like the footballer Cristiano Ronaldo to promote his own designer footwear, as well as leading fashion brands like Sonia Rykiel and Laurel. It also plans to open high-quality casual dining outlets in retail centres.

The strategy is to offer these high-value products through top-end malls in Dubai and Abu Dhabi, and then expand in Saudi Arabia, Kuwait and Qatar, aiming to become the “leading retail operator in the GCC”, the company said in a statement yesterday.

Mr Al Hai said that Marka was working on a big deal. “There is a big acquisition in the pipeline, in the retail and branding area. We are working on it and it will be announced soon.”