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 mulls contingency plan for DP World bourse exit
By Claire Ferris-Lay and Kat Slowe
Thu 06 Aug 2009 03:17 PM

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.

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