Fadi Ghandour, the co-founder and former chief executive of Aramex, discusses the company's history as a listed company – and what local markets must do to attract more listings.
What pushed you to list Aramex on Nasdaq? What motivated you to delist?
We listed on Nasdaq because we were not able to raise a private round in the region, and we needed the money to grow the business and invest in technology, among other things. We delisted because we felt that being on Nasdaq does not give the company its due value, being based in the Middle East, with little brand recognition in the US. At the same time our stock was not very liquid and there was little trading in it, and my partner wanted to exit, so Abraaj came along and put the proposal for a leveraged buyout and that is exactly what we did.
Aramex is now the most sought-after stock by foreign investors on the DFM. What are your thoughts?
I think people like the Aramex story; they like the industry and market we are covering; they like the management and its depth; they also like our governance process and the way we interact with our investors. We don’t oversell our story, we are clear and transparent when we state our strategy. And mostly we are consistent in delivering on our financials. We have been growing our net income every year since we have gone public, including the financial crisis years. That makes the stock attractive in a volatile region.
Do you recommend UAE companies to list on the ADX and DFM over international listings?
I like being on the DFM, but if I am to recommend people to list on this market, then there are some things that need to change – all related to company law in the UAE and not the public markets. Foreign ownership restrictions have to be lifted – they serve no purpose unless it is a strategic business for the country, but then they can have different types of shares, (like voting and non-voting shares). Clear stock option rules have to be installed, and using the stock as a currency is a huge restriction on growth. Finally, I think companies need to be able to list and delist easily. On the DFM or ADX, if you are listed then buying your company back or delisting it is not easy or even possible.
halsayegh@thenational.ae
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