I have been searching for a solution to this paradox for some time: The UAE wants to maintain its lead position as the financial centre of the Arabian Gulf region, and one of the requirements for such a place is a strong equities market in the country.
Yet, for all the encouragement that policymakers provide to local companies to list on UAE exchanges, some still prefer to go overseas for listings, especially to London.
In little over a year, two companies, both in the healthcare sector, have opted for listings on the London Stock Exchange, rather than the local markets. Al Noor Hospitals gained a US$1 billion listing in June, following the example set by NMC last year.
Both have had successful initial public offerings and good after-market trading in sometimes difficult conditions for equities, it must be stressed. But what decided their initial choice of London?
Before you get to an answer to that question, some myths should be dispelled. One of the often-stated reasons for corporates' preference for London rather than the UAE is the supposedly disjointed nature of markets in the Emirates.
It is said that having three markets - Abu Dhabi Securities Exchange, the Dubai Financial Market and Nasdaq Dubai - confuses investors.
But, on closer examination, this does not really seem to be the reason for the preference for London. Those markets are in the process of being consolidated anyway, and in the age of electronic share dealing, it does not really matter that there are three platforms. What matters is liquidity.
But nor does the quest for liquidity adequately explain why some UAE companies have opted for London. Liquidity is a function of supply and demand, and availability of equity to be traded. Again, in the era of "dark pools" of liquidity operating on a global level, it should make little difference where shares are physically listed. As long as there is demand and availability, there will be liquidity.
Another myth was recently dispelled for good. The UAE's promotion to emerging market status by MSCI removed the objections of some international investors that were prevented by their own rules from investing in more risky "frontier" markets.
So why do some UAE companies still prefer London to the UAE? For the past couple of weeks I've been posing that question to every London-based investment banker I have met (and there have been many) and there seems to be a unanimity of response - the rules in London are regarded as more beneficial for private company investors, especially those seeking to raise money from the IPO.
This is obvious in three main areas. First, the London requirement for an IPO is that only 25 per cent of the company's shares have to be publicly tradable, as opposed to more than 50 per cent on ADX and DFM
This is ironic, as the UAE rule seems designed to promote greater liquidity, but it appears that founder-investors are reluctant to hand over majority control when they go public.
The second reason is related. Under the rules of the Securities and Commodities Authority in the UAE, any new money raised in an IPO must go to the company, rather than the investors. This again acts as a deterrent to founder-shareholders who, quite justifiably, might want to realise some profit from their hard work in setting up a company and making it successful.
Third, there is the fact that on the London market, the price of the listing is determined by the market, usually in a book-building exercise that attempts to match demand for the shares with the number of shares to be issued.
In the UAE, the SCA effectively tells the issuer what the price should be. Again, this is regarded as a negative by most would-be issuers (at least outside Nasdaq Dubai, where book-building is permitted).
So the arguments in favour of London really boil down to some structural differences, which could easily be rectified in UAE company law and regulatory practice.
If the Emirates' markets wish to halt the flow of IPOs to London, they should look to these adjustments to the system.
fkane@thenational.ae
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
'Tell the Machine Goodnight' by Katie Williams
Penguin Randomhouse
Match info
Uefa Champions League Group F
Manchester City v Hoffenheim, midnight (Wednesday, UAE)
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
South Africa v India schedule
Tests: 1st Test Jan 5-9, Cape Town; 2nd Test Jan 13-17, Centurion; 3rd Test Jan 24-28, Johannesburg
ODIs: 1st ODI Feb 1, Durban; 2nd ODI Feb 4, Centurion; 3rd ODI Feb 7, Cape Town; 4th ODI Feb 10, Johannesburg; 5th ODI Feb 13, Port Elizabeth; 6th ODI Feb 16, Centurion
T20Is: 1st T20I Feb 18, Johannesburg; 2nd T20I Feb 21, Centurion; 3rd T20I Feb 24, Cape Town
Mental%20health%20support%20in%20the%20UAE
%3Cp%3E%E2%97%8F%20Estijaba%20helpline%3A%208001717%3Cbr%3E%E2%97%8F%20UAE%20Ministry%20of%20Health%20and%20Prevention%20hotline%3A%20045192519%3Cbr%3E%E2%97%8F%20UAE%20Mental%20health%20support%20line%3A%20800%204673%20(Hope)%3Cbr%3EMore%20information%20at%20hope.hw.gov.ae%3C%2Fp%3E%0A
The specs
Engine: 1.5-litre, 4-cylinder turbo
Transmission: CVT
Power: 170bhp
Torque: 220Nm
Price: Dh98,900
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Tu%20Jhoothi%20Main%20Makkaar%20
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ELuv%20Ranjan%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ERanbir%20Kapoor%2C%20Shraddha%20Kapoor%2C%20Anubhav%20Singh%20Bassi%20and%20Dimple%20Kapadia%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
Monster Hunter: World
Capcom
PlayStation 4, Xbox One
Overall standings
1. Christopher Froome (GBR/Sky) 68hr 18min 36sec,
2. Fabio Aru (ITA/AST) at 0:18.
3. Romain Bardet (FRA/ALM) 0:23.
4. Rigoberto Uran (COL/CAN) 0:29.
5. Mikel Landa (ESP/SKY) 1:17.
WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
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PRISCILLA
%3Cp%3EDirector%3A%20Sofia%20Coppola%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Cailee%20Spaeny%2C%20Jacob%20Elordi%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
Film: In Syria
Dir: Philippe Van Leeuw
Starring: Hiam Abbass, Diamand Bo Abboud, Mohsen Abbas and Juliette Navis
Verdict: Four stars
If you go
- The nearest international airport to the start of the Chuysky Trakt is in Novosibirsk. Emirates (www.emirates.com) offer codeshare flights with S7 Airlines (www.s7.ru) via Moscow for US$5,300 (Dh19,467) return including taxes. Cheaper flights are available on Flydubai and Air Astana or Aeroflot combination, flying via Astana in Kazakhstan or Moscow. Economy class tickets are available for US$650 (Dh2,400).
- The Double Tree by Hilton in Novosibirsk ( 7 383 2230100,) has double rooms from US$60 (Dh220). You can rent cabins at camp grounds or rooms in guesthouses in the towns for around US$25 (Dh90).
- The transport Minibuses run along the Chuysky Trakt but if you want to stop for sightseeing, hire a taxi from Gorno-Altaisk for about US$100 (Dh360) a day. Take a Russian phrasebook or download a translation app. Tour companies such as Altair-Tour ( 7 383 2125115 ) offer hiking and adventure packages.
Sreesanth's India bowling career
Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
Results
- Brock Lesnar retained the WWE Universal title against Roman Reigns
- Braun Strowman and Nicolas won the Raw Tag Team titles against Sheamus and Cesaro
- AJ Styles retained the WWE World Heavyweight title against Shinsuke Nakamura
- Nia Jax won the Raw Women’s title against Alexa Bliss
- Daniel Bryan and Shane McMahon beat Kevin Owens and Sami Zayn
- The Undertaker beat John Cena
- The Bludgeon Brothers won the SmackDown Tag Team titles against the Usos and New Day
- Ronda Rousey and Kurt Angle beat Triple H and Stephanie McMahon
- Jinder Mahal won the United States title against Randy Orton, Rusev and Bobby Roode
- Charlotte retained the SmackDown Women’s title against Asuka
- Seth Rollins won the Intercontinental title against The Miz and Finn Balor
- Naomi won the first WrestleMania Women’s Battle Royal
- Cedric Alexander won the vacant Cruiserweight title against Mustafa Ali
- Matt Hardy won the Andre the Giant Battle Royal
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Other ways to buy used products in the UAE
UAE insurance firm Al Wathba National Insurance Company (AWNIC) last year launched an e-commerce website with a facility enabling users to buy car wrecks.
Bidders and potential buyers register on the online salvage car auction portal to view vehicles, review condition reports, or arrange physical surveys, and then start bidding for motors they plan to restore or harvest for parts.
Physical salvage car auctions are a common method for insurers around the world to move on heavily damaged vehicles, but AWNIC is one of the few UAE insurers to offer such services online.
For cars and less sizeable items such as bicycles and furniture, Dubizzle is arguably the best-known marketplace for pre-loved.
Founded in 2005, in recent years it has been joined by a plethora of Facebook community pages for shifting used goods, including Abu Dhabi Marketplace, Flea Market UAE and Arabian Ranches Souq Market while sites such as The Luxury Closet and Riot deal largely in second-hand fashion.
At the high-end of the pre-used spectrum, resellers such as Timepiece360.ae, WatchBox Middle East and Watches Market Dubai deal in authenticated second-hand luxury timepieces from brands such as Rolex, Hublot and Tag Heuer, with a warranty.
MORE ON TURKEY'S SYRIA OFFENCE
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
PREMIER LEAGUE STATS
Romelu Lukaku's goalscoring statistics in the Premier League
Season/club/appearances (substitute)/goals
2011/12 Chelsea: 8(7) - 0
2012/13 West Brom (loan): 35(15) - 17
2013/14 Chelsea: 2(2) - 0
2013/14 Everton (loan): 31(2) - 15
2014/15 Everton: 36(4) - 10
2015/16 Everton: 37(1) - 18
2016/17 Everton: 37(1) - 25
UAE%20medallists%20at%20Asian%20Games%202023
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MATCH INFO
Austria 2
Hinteregger (53'), Schopf (69')
Germany 1
Ozil (11')
Inside%20Out%202
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Company name: Play:Date
Launched: March 2017 on UAE Mother’s Day
Founder: Shamim Kassibawi
Based: Dubai with operations in the UAE and US
Sector: Tech
Size: 20 employees
Stage of funding: Seed
Investors: Three founders (two silent co-founders) and one venture capital fund
Bawaal%20
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Florence and the Machine – High as Hope
Three stars
Subscribe to Beyond the Headlines
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