UAE set for up to eight IPOs this year, raising about $10bn, Emirates NBD Capital CEO says

Stock markets in the UAE are expected to receive between six to eight initial public offering (IPO) this year, with companies raising up to $10 billion in proceeds amid strong investor appetite for new listings in the Emirates, the chief executive of Emirates NBD Capital has said.

The continued economic momentum in the country along with strong liquidity will drive capital market activity, Hitesh Asarpota told The National.

“There is a mix of companies that will be listed this year," he said. "They've already been slotted into the various quarters and so on ... what some of these companies do is add on to the pipeline that we see."

There has been a listings boom in the UAE in the past few years as the Arab world’s second-largest economy continues to grow amid diversification efforts. On Tuesday, technology company Alpha Data listed its shares on the Abu Dhabi Securities Exchange after raising Dh600 million ($163 million) from its IPO.

As part of the transaction, the company sold 400 million shares to retail and professional investors. Emirates NBD Capital acted as the joint global co-ordinator and joint bookrunner for the IPO.

Alpha Data’s shares were trading 12 per cent higher at Dh1.69 per share at 1.31pm UAE time on Tuesday, compared with the final offer price of Dh1.50 per share, giving it a market capitalisation of Dh1.6 billion.

There were seven IPOs across the UAE last year, including Talabat Holding, major retailer Lulu Group, ADNH Catering, NMDC Energy and Alef Education. IPOs in the UAE accounted for 47 per cent, or $6.2 billion, of total Gulf proceeds last year, PwC said in a report.

Overall, 2024 saw the highest Gulf IPO volumes on record, with 53 listings across the region and a total of $13.2 billion raised, the report said.

There are “quite a few factors” that support company listings in the UAE, as well as in Saudi Arabia and Oman, Mr Asarpota said.

As part of efforts by the three countries "to overhaul the equity capital market ecosystem through privatisation", there has been a stream of "marquee companies going and listing a percentage on the stock exchange”, he added.

In 2021, the Dubai Financial Market unveiled an incentives programme to encourage new IPOs from private sector companies in key economic sectors that contribute to the country's gross domestic product.

The incentives included financial support to the cost of listing on the bourse, post-listing support through participation in its international roadshows regionally and globally, and a three-year waiver on listing fees.

The same year, Dubai also revealed plans to list 10 government and state-owned companies on the DFM as part of a broader strategy to double the financial market's size to Dh3 trillion.

Meanwhile, the availability of strong liquidity in the UAE amid strong economic growth is also supporting listings, Mr Asarpota said. There has also been a strong interest from international investors for IPOs in the country, he added.

The UAE’s economy grew by 3.8 per cent during the first nine months of last year, driven by a strong expansion in non-oil sectors as the country continues to diversify its economy.

Real GDP for the period rose to Dh1.32 trillion, state news agency Wam reported this month. The country's non-oil economy grew by 4.5 per cent annually to Dh987 billion, accounting for nearly 75 per cent of the country's economic activity, while the oil sector made up the rest.

In Saudi Arabia, the Arab world’s largest economy, there are expected to be about 30 IPOs this year.

“Saudi Arabia continues to be very active. They have two exchanges and both are active," Mr Asarpota said. “One is the Nomu exchange, where the smaller stocks list. They tend to see 15 to 20 IPOs on that exchange and then between seven and 10 IPOs on the main exchange [Tadawul].”

Tech push

He also expects more technology companies to be listed on local bourses following the Alpha Data listing and the government's plans on boosting the digital economy to support technology infrastructure.

The UAE launched its Digital Economy Strategy in 2022, which it wants to use to double the contribution of the digital economy to the country's GDP from 9.7 per cent in 2022 to 19.4 per cent within 10 years. The country also launched an AI Strategy, aimed at making the Emirates "the first in the field of AI investments in various sectors".

Last year, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, also approved the new phase of the Dubai Metaverse Strategy, which aims to boost the digital economy and introduce measures to empower the use of the metaverse and future technology.

"The key kind of pillars of [those strategies are] to develop and support infrastructure that's essential for AI and the digital economy," Mr Asarpota said.

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