2021 will be a turning point for UAE’s sedentary IPO market
The coronavirus pandemic and market volatility has subdued the UAE’s IPO activity this year, causing companies to shelve their listings. But, what is in store for 2021?
When you speak of 2020’s IPOs in the Middle East, the UAE warrants only a passing reference due to the dearth of listings. Instead, the UAE’s neighbour, Saudi Arabia, dominates discourse following a spate of public offerings this year, including Dr Sulaiman Al Habib’s $700m IPO, Amlak International and BinDawood Holding. Prior to these, we witnessed the colossus Aramco coming to the market.
The kingdom’s hot IPO market is set to continue rolling out companies primed to go public, with Theeb Rent a Car, Hamburgini, Nahdi Medical Co and STC’s Solutions expected to come off the IPO conveyor belt.
But, what of the UAE? The coronavirus pandemic and market volatility has subdued the UAE’s IPO activity this year, causing companies to shelve their listings. However, commentators have suggested a relatively healthy pipeline with at least three candidates expected to go public in the first half of next year, naming MAG Development and Seafood Souq General Trading among others.
While the names might differ, I would concur with the sentiment. In 2021, the UAE will shift to the next gear to accelerate its sedentary IPO market. With the coronavirus crisis, the UAE did not sit back in the hope of change; it was exemplary in making moves to spur market activity. Afterall, Winston Churchill did famously say, “Never let a good crisis go to waste.”
This brave spirit is perfectly epitomised in the launch of the Nasdaq Dubai Growth Market by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. This is where I see the biggest opportunity for Dubai’s capital markets in the coming year.
Aimed at helping high-growth SMEs raise capital, the Nasdaq Dubai Growth Market allows SMEs to list their businesses valued below $250 million while selling as little as 25 percent of the shares in a company, ensuring that owners keep control.
For any SME, this is a God send. Fundraising is a particular bugbear for startups, so any platform that provides access to capital is hugely welcome. The added benefit of the Growth Market to SMEs is visibility since they struggle to get noticed by investors. Nasdaq Dubai’s innovate platform circumvents this issue, providing high-growth SMEs with a boost in profile. On the flip side, investors are presented with attractive opportunities on a platform which is regulated by international standards.
In turn, this boost Dubai’s ecosystem, generating potentially more wealth for the city and the UAE as a whole, as fast-growing SMEs from other markets set their sights on listing here. I see this as a real possibility.
My team and I have travelled to 11 cities in China since May 2019, building our on-the-ground presence in the country and engaging with local companies. We have seen significant interest in Dubai as a destination for listings with a plethora of exciting companies, expressing an interest. More so since October when the Crown Prince launched Nasdaq Dubai Growth Market.
I’m confident that 2021 will be a turning point for the exchange with a number of listings, with some as soon as Q1. This will represent a boost to the market and further cement Dubai’s position as a leading hub for innovation and entrepreneurialism, and as a city that fuels local and regional growth.
Faheem Aziz, CEO of Safa Capital, a leading private wealth manager and corporate advisory firm which acts as DFSA approved sponsors and compliance advisors to companies listing on Nasdaq Dubai. Safa Capital is headquartered in DIFC, and regulated and authorised by the DFSA
Follow us on
For all the latest business news from the UAE and Gulf countries, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.
by Staff Writer
More of this topic
2021 will be a turning point for UAE’s sedentary IPO market
The coronavirus pandemic and market volatility has subdued the UAE’s IPO activity this year, causing companies to shelve their listings. But, what is in store for 2021?
Faheem Aziz, CEO of Safa Capital.
When you speak of 2020’s IPOs in the Middle East, the UAE warrants only a passing reference due to the dearth of listings. Instead, the UAE’s neighbour, Saudi Arabia, dominates discourse following a spate of public offerings this year, including Dr Sulaiman Al Habib’s $700m IPO, Amlak International and BinDawood Holding. Prior to these, we witnessed the colossus Aramco coming to the market.
The kingdom’s hot IPO market is set to continue rolling out companies primed to go public, with Theeb Rent a Car, Hamburgini, Nahdi Medical Co and STC’s Solutions expected to come off the IPO conveyor belt.
But, what of the UAE? The coronavirus pandemic and market volatility has subdued the UAE’s IPO activity this year, causing companies to shelve their listings. However, commentators have suggested a relatively healthy pipeline with at least three candidates expected to go public in the first half of next year, naming MAG Development and Seafood Souq General Trading among others.
While the names might differ, I would concur with the sentiment. In 2021, the UAE will shift to the next gear to accelerate its sedentary IPO market. With the coronavirus crisis, the UAE did not sit back in the hope of change; it was exemplary in making moves to spur market activity. Afterall, Winston Churchill did famously say, “Never let a good crisis go to waste.”
This brave spirit is perfectly epitomised in the launch of the Nasdaq Dubai Growth Market by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. This is where I see the biggest opportunity for Dubai’s capital markets in the coming year.
Aimed at helping high-growth SMEs raise capital, the Nasdaq Dubai Growth Market allows SMEs to list their businesses valued below $250 million while selling as little as 25 percent of the shares in a company, ensuring that owners keep control.
For any SME, this is a God send. Fundraising is a particular bugbear for startups, so any platform that provides access to capital is hugely welcome. The added benefit of the Growth Market to SMEs is visibility since they struggle to get noticed by investors. Nasdaq Dubai’s innovate platform circumvents this issue, providing high-growth SMEs with a boost in profile. On the flip side, investors are presented with attractive opportunities on a platform which is regulated by international standards.
In turn, this boost Dubai’s ecosystem, generating potentially more wealth for the city and the UAE as a whole, as fast-growing SMEs from other markets set their sights on listing here. I see this as a real possibility.
My team and I have travelled to 11 cities in China since May 2019, building our on-the-ground presence in the country and engaging with local companies. We have seen significant interest in Dubai as a destination for listings with a plethora of exciting companies, expressing an interest. More so since October when the Crown Prince launched Nasdaq Dubai Growth Market.
I’m confident that 2021 will be a turning point for the exchange with a number of listings, with some as soon as Q1. This will represent a boost to the market and further cement Dubai’s position as a leading hub for innovation and entrepreneurialism, and as a city that fuels local and regional growth.
Faheem Aziz, CEO of Safa Capital, a leading private wealth manager and corporate advisory firm which acts as DFSA approved sponsors and compliance advisors to companies listing on Nasdaq Dubai. Safa Capital is headquartered in DIFC, and regulated and authorised by the DFSA
Follow us on
Latest News