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Thu 6 Aug 2009 03:17 PM

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Nasdaq Dubai mulls contingency plan for DP World bourse exit

DP World has lost 72% of its listed value since joining the bourse in Nov 2007.

Nasdaq Dubai has admitted that it is examining contingency plans should its largest stock, DP World , chose to leave the bourse. DP World has lost 72 percent of its listed value since it joined the bourse in November 2007.

In March, the firm said was evaluating “all available options” to address its declining share price and in May confirmed it was in talks that could lead to the sale of a large stake to a private equity group, significantly reducing its share float.

“It certainly wouldn’t be positive when most of your stock is taken off, but we have contingency plans in other areas in terms of new listings [and] new products to buoy up the exchange for different sources of revenues,” Nasdaq Dubai CEO, Jeff Singer, told Arabian Business.

Nasdaq Dubai, formerly known as the Dubai International Financial Exchange, has struggled with low volumes since its inception in 2005. The global financial crisis has forced a number of companies to delay listing their shares on the exchange while a number of existing companies have said they are looking for other ways to combat undervalued stock.

On Monday Depa, the world’s largest interior fit-out company, canceled more than 12 million shares that it had repurchased after saying its stock was undervalued. Depa’s shares have fallen 51.8 percent in the last year.

Singer added that he was focusing on growing the bourse’s derivatives and gold markets. “We are really bigging up that market [and] we are looking for new asset classes and the one we’ve just released is a Sharia-compliant gold product that actually tracks the physical [commodity],” he said.

“So you can buy gold and sell gold and if you truly want to have the physical you can go and get it. I can see that happening with other commodities as well,” he added.

Nasdaq Dubai, which is one third owned by Nasdaq OMX, the world’s largest exchange group, was the Gulf’s first stock market to open to investors and issuers of all nationalities, in a bid to fill the trading-time gap between Asia and Western Europe.

Investor 10 years ago

So, if they de-list what will happen to the investors like me who have invested.

Drake 10 years ago

To be really honest, Nasdaq Dubai started off with the right intentions - to fill the trading gap between Western Europe and Asia - but with 2 stock exchanges in Dubai and 1 in AD, it was way over-kill. I have a huge amount of cash, pumped into the DPW stock (from the IPO allotment and subsquently during the first month of trading). No doubt DPW is a solid company with good fundamentals - but Nasdaq Dubai is the wrong platform. Had DPW been on the DFM exchange, it wouldnt be trading 72% below its IPO price *sigh* Here's hoping the DPW mgmt, seriously consider listing the stock on DFM.

Bya 10 years ago

I agree that there are too many exchanges in one little country, but people say that had the stocks on NASDAQ Dubai listed on DFM they wouldn't have fallen in value. But what are they basing this on? Most DFM stocks have fallen 80% since the good old days. Basically you're blaming you're investment's failure on the exchange, I don't believe the exchange has anything to do with a company's stock price. If DPW was listed in Honalulu , people would buy and sell it based on what they think the right price is, and not based on which exchange it is listed in. I invested in DPW @ 0.20 and managed to make almost 100% on my investment. I also got in on the IPO and made a loss. But this is a stock market, and it goes both ways. Also, you should be looking at DPW and DEPA and asking them why they priced their stock so high initially. Unlike DFM , NASDAQ Dubai offer listed companies the oppurtinity to get fair value from the IPO and not just list at 1 dirham. The companies and their lead managers obviously took everything on the table and left nothing for the investors, hence the fall in share place in the IPO. Now these same companies are complaining about the decline in their share price after taking so much money from investors. If they actually cared about the investors, then maybe they should've thought about them when DPW greedily valued themselves at 1.33 per share. If you had invested in Amlak or Tamweel (like I have) , you would think twice about investing on DFM, the regulations are vague and transparency doesn't exist. (Tamweel announced a profit and then went bankrupt 2 weeks later and then got suspended) Amlak and Tamweel FYI have been suspended for almost 8 months! A stock market is supposed to be a liquid investment, and it shouldn't prevent me from having access to my invested money for 8 months.. I could've sold a house , which is considered an illiquid asset in 8 months! What's worse is, nobody knows when or if they will start trading again. they're just looking for something to blame it on, and blaming the exchange seems to do the job. Well done!

macca 10 years ago

After the way this crash has been handled in Dubai no one will ever have the faith or trust again. We have all be let down, all the developed countries acted and did something, it is now working for them, so that is the place to ge to and invest for the future, even China has led the way with low interest rates and central investment. It embarrassing, it really is.

Activetrader 9 years ago

Nice Post! I also agree that there are too many exchanges in one little country and Nasdaq Dubai, which is one third owned by Nasdaq OMX, the world’s largest exchange group. I would like to say some words about how we invest in NASDAQ. Spend some time researching the most actively traded companies on the NASDAQ, as well as companies that are experiencing higher-than-normal trading volume.

Riz 9 years ago

I am totally agreed with the comment of Mr. Bya, I am also a victim of $1.33 share price of DP world I lost AED 50k at this price. DFM and Nasdaq must have to laid down the proper guidelines for the companies entering the exchange market while they have a great example of Tamweel.

Rizvi 9 years ago

I am totally agree with Mr. Bya in this forum. DFM and Nasdaq should laid a proper regulations, guidelines & exit restrictions for the corporations entering the exchange markets when we have an example of Tamweel. I am also a victim of $ 1.33/share price of DP world. Major part of my savings sunk with the DP world caravans. UAE exchange market is worst for investment where major chunk is short term investors who look only for short term profits and escape to their GCC countries with their part of peanuts.

AmerH 9 years ago

You should also focus on the lack of exchange knowledge and respect for the region of people like Jeff Singer, since joining to NASDAQ Dubai he has done nothing to boost business, increase liquidity or attract Investors. In fact all he has done is increase the debt. The whole DFM consolidation was a sham to enable DFM to take over and eventually shut down the NASDAQ Dubai exchange by the end of 2010. If DP World wants to achieve its desired price is should delist from the UAE & list on the LSE.