Three firms set to end 17-month IPO drought on Dubai's DFM

Dubai Financial Market says companies are preparing initial public offerings for trading
Three firms set to end 17-month IPO drought on Dubai's DFM
Investors follow the stock market activity at the Dubai Financial Market. (MARWAN NAAMANI/AFP/Getty Images)
By Bloomberg
Thu 18 Apr 2019 03:02 PM

Three companies are preparing initial public offerings for trading on Dubai’s main stock exchange, the bourse said, potentially ending a 17-month IPO drought as it boosts efforts to entice local firms to list domestically rather than abroad.

“We are at different stages of discussions with potential issuers including three companies from the industry, oil and gas services as well as healthcare sectors,” exchange operator Dubai Financial Market said in an emailed response to questions.

The timing of the deals is up to the companies, it said.

Liquidity in Dubai’s main stock market has slumped in the past four years as a drop in oil prices hampered economies across the Gulf, reducing trading volumes and slowing share sales.

The last IPO on the DFM was in late 2017, when Emaar Development sold $1.3 billion in new shares. Last week, Dubai-based Network International raised 1.1 billion pounds ($1.4 billion) for a London listing.

The stock exchange is working with local regulators to encourage initial share sales, including enabling companies based in the emirate’s economic free zones to access the market. Two such companies are considering IPOs through an electronic platform that’s in development, according to DFM.

The bourse is looking to increase the representation of tourism, retail, healthcare and education among listed companies. About 75 percent of the members of Dubai’s main gauge are from the financial or real estate sectors.

The benchmark has gained 11 percent this year, after a loss of 25 percent in 2018, its worst performance in a decade.

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