Shares in Damac, the Dubai-based luxury developer, begin trading today on the Dubai Financial Market, in the latest test of regional investors' appetite for the property sector.
Holders of Damac global depositary receipts (GDRs) voted overwhelmingly to swap each GDR for 23.08 ordinary shares on the Dubai market. In the year since GDRs were listed on the London Stock Exchange, they have performed strongly, showing a near 23 per cent increase, despite concerns that UAE property markets were slowing down. A small percentage of GDRs will remain traded in London after their holders elected not to swap them.
Pricing of the new stock will be left until the final minutes before trading begins, according to an adviser to Damac. The GDRs rose strongly in trading last week, hitting US$17.95 to value the company at $3.8 billion.
Only about 14 per cent of the equity will be floated on the DFM. The balance is ultimately held by Hussain Sajwani, the founder and chairman of Damac and one of the wealthiest men in the UAE.
Damac announced last summer that it would convert GDRs to shares to attract more liquidity and interest from investors in its home markets. Timing of the actual move to DFM was delayed by administrative hurdles.
Since the original plan, Dubai exchanges have fallen off sharply on the effects of the falling price of oil in global markets.
“In the current climate I expect there will be only limited investor interest, but long term they will be fine. They pay a big cash dividend and the region understands property stocks,” said the adviser.
fkane@thenational.ae
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