Token sales in the UAE may gain further traction with companies looking to raise capital rather than take on the high costs of initial public offerings, according to industry experts. However challenges remain.
"An IPO is a very lengthy and expensive process … completely out of the reach for many enterprises in the UAE," Irina Heaver, executive vice president of group general counsel at UAE-headquartered investment firm Bolton Holdings, told The National.
“With emerging technologies such as blockchain, smart contracts are used to design tokens that are sold to investors. They are quick, within the reach of SMEs and an attractive capital formation option [rather] than going for an IPO.”
Two companies in the UAE raised nearly $210.5 million in token sales this year to the end of April – accounting for almost a quarter of the total capital amassed globally, according to the data compiled by UK-based CoinSchedule that provides blockchain intelligence. The UAE raised the most worldwide, followed by the Cayman Islands ($116m), Singapore ($90m), the UK ($88m) and Hong Kong ($76m).
Token sales involve selling a token or a digital cryptocurrency to investors to raise funds. Raised capital is used for the purposes outlined during the token sale, for example – technology development or asset acquisition.
"Being a hub of finance and technology in the Middle East, it will not be surprising to see UAE experiencing a fast uptick in the demand for token sales in the coming days. Blockchain companies will be attracted by a clear and not excessively restrictive regulatory framework," Andrea Bonaceto, chief executive of Eterna Capital, a London-based fund management firm, told The National.
Tokenisation allows the transfer of assets from peer to peer without the need of intermediaries, said Mr Bonaceto, adding, “They [tokens] can represent assets, businesses and products ... and [this] has also led to new business models, which were previously not possible.”
Hans Fraikin, chief executive of Abu Dhabi-based Libra Project, which is issuing equity tokens in green utility infrastructure, has a word of caution.
He said it is important to distinguish between "funds raised in token sales", and "number of token sold".
"These are two different statistics," said Mr Fraikin.
“SCA [Securities and Commodities Authority], the UAE’s federal capital markets regulator, is yet to pass legislation regulating the trading of digital securities. Once this happens, which is expected to be in a matter of months, undoubtedly the UAE’s position as a ‘token sales’ hub will rise to the position of world leader,” added Mr Fraikin.
“We will be tokenising our renewable energy project assets as soon as the authorities approve digital securities trading.”
Bolton Holding, which raised $67.8m during its first tranche of the digital tokens sale in the first four months of 2019, said part of the capital was raised out of the UAE. It added that token sales would gain momentum once there are supporting regulations.
“Coming up with the regulatory regime for tokenised securities or tokenised commodities will bring a lot of intellectual and financial capital into the UAE," said Ms Heaver.
She added that this region still prefers to invest in the traditionally safe sectors, such as education, hospitals and real estate and needs a strong push to move towards tokens. The other company Genesis Crypto Blockchain Investment Bank (GCBIB) raised Dh142.7m.
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KILLING OF QASSEM SULEIMANI
if you go
The flights
Fly to Rome with Etihad (www.etihad.ae) or Emirates (www.emirates.com) from Dh2,480 return including taxes. The flight takes six hours. Fly from Rome to Trapani with Ryanair (www.ryanair.com) from Dh420 return including taxes. The flight takes one hour 10 minutes.
The hotels
The author recommends the following hotels for this itinerary. In Trapani, Ai Lumi (www.ailumi.it); in Marsala, Viacolvento (www.viacolventomarsala.it); and in Marsala Del Vallo, the Meliaresort Dimore Storiche (www.meliaresort.it).
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
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%3Cp%3EThe%20UAE%20flag%20was%20first%20unveiled%20on%20December%202%2C%201971%2C%20the%20day%20the%20UAE%20was%20formed.%C2%A0%3C%2Fp%3E%0A%3Cp%3EIt%20was%20designed%20by%20Abdullah%20Mohammed%20Al%20Maainah%2C%2019%2C%20an%20Emirati%20from%20Abu%20Dhabi.%C2%A0%3C%2Fp%3E%0A%3Cp%3EMr%20Al%20Maainah%20said%20in%20an%20interview%20with%20%3Cem%3EThe%20National%3C%2Fem%3E%20in%202011%20he%20chose%20the%20colours%20for%20local%20reasons.%C2%A0%3C%2Fp%3E%0A%3Cp%3EThe%20black%20represents%20the%20oil%20riches%20that%20transformed%20the%20UAE%2C%20green%20stands%20for%20fertility%20and%20the%20red%20and%20white%20colours%20were%20drawn%20from%20those%20found%20in%20existing%20emirate%20flags.%3C%2Fp%3E%0A
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Gran Gala del Calcio 2019 winners
Best Player: Cristiano Ronaldo (Juventus)
Best Coach: Gian Piero Gasperini (Atalanta)
Best Referee: Gianluca Rocchi
Best Goal: Fabio Quagliarella (Sampdoria vs Napoli)
Best Team: Atalanta
Best XI: Samir Handanovic (Inter); Aleksandar Kolarov (Roma), Giorgio Chiellini (Juventus), Kalidou Koulibaly (Napoli), Joao Cancelo (Juventus*); Miralem Pjanic (Juventus), Josip Ilicic (Atalanta), Nicolo Barella (Cagliari*); Fabio Quagliarella (Sampdoria), Cristiano Ronaldo (Juventus), Duvan Zapata (Atalanta)
Serie B Best Young Player: Sandro Tonali (Brescia)
Best Women’s Goal: Thaisa (Milan vs Juventus)
Best Women’s Player: Manuela Giugliano (Milan)
Best Women’s XI: Laura Giuliani (Milan); Alia Guagni (Fiorentina), Sara Gama (Juventus), Cecilia Salvai (Juventus), Elisa Bartoli (Roma); Aurora Galli (Juventus), Manuela Giugliano (Roma), Valentina Cernoia (Juventus); Valentina Giacinti (Milan), Ilaria Mauro (Fiorentina), Barbara Bonansea (Juventus)
