We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 19 Jul 2010 02:18 PM

Font Size

- Aa +

UAE's first IPO delayed over weak market - source

Banking source says Shuaa IPO will not take place before the fourth quarter.

The UAE's first IPO of 2010, scheduled for June by lead manager Shuaa Capital, will not take place before the fourth quarter due to the weak market, a banking executive familiar with the matter said.

Shuaa said in May it was lead manager for a AED1 billion UAE ($272 million) IPO for an unnamed Abu Dhabi company.

A Shuaa spokeswoman declined to comment.

"It's not happening until after Ramadan, we're talking early fourth quarter now," the executive said on Monday. "They've decided not to do it now because the market is not doing well and the European crisis didn't help either."

The news signals that the country's market for IPOs, damaged by the financial crisis of 2008, remains a long way from recovery. Ramadan lasts for a month and is due to begin in early August.

Shuaa's chief executive Sameer al Ansari said in May that the IPO would encourage hundreds of other companies to follow suit and seek a listing by the end of the year.

Shuaa has not identified the company involved, but the banking source said it was an infrastructure company.

The Middle Eastern IPO market has shown few signs of recovery. Experts have said family businesses across the region are hoping to turn to the equity markets to raise cash, but the current lack of investor interest coupled with the debt trouble some of these companies carry hamper the sector's revival. In the Gulf region, the only IPOs that of 2010 have been in Saudi Arabia and Qatar, a study from PricewaterhouseCoopers (PwC) showed.

Still, IPO activity is expected to rebound soon, PwC said.

"We are seeing a significant increase in activity behind the scenes and a number of companies are gearing up for IPO this year," said Steve Drake, head of Middle East Capital Markets Group at PricewaterhouseCoopers.

"There has been a step change in sentiment and with a pent up demand for capital, companies are preparing to come to the market. As it takes between six and nine months to prepare for IPO, we're likely to see more companies list by the end of the year or early 2011," he added. (Reuters)

Arabian Business: why we're going behind a paywall

For all the latest UAE 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.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.