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UAE’s Fertiglobe Plans IPO of 13.8% Stake

One of Fertiglobe’s facilities (Asharq Al-Awsat)
One of Fertiglobe’s facilities (Asharq Al-Awsat)
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UAE’s Fertiglobe Plans IPO of 13.8% Stake

One of Fertiglobe’s facilities (Asharq Al-Awsat)
One of Fertiglobe’s facilities (Asharq Al-Awsat)

Abu Dhabi National Oil Company (ADNOC) and chemical producer OCI N.V. plan an initial public offering (IPO) of 13.8 percent of the shares in fertilizer joint venture Fertiglobe on the Abu Dhabi Securities Exchange (ADX).

The Offering will be the first listing of a free zone company onshore in the UAE and is open to all citizens and residents of the UAE as well as local and international institutional investors in several countries, the joint venture said on Tuesday.

UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, and Fertiglobe Chairman Sultan Ahmed al-Jaber said the launch of Fertiglobe’s IPO exemplifies ADNOC’s pivotal role in driving the growth and diversification of the nation’s economy, supporting the further development of the UAE’s private sector and equity capital markets, and attracting foreign direct investment.

He explained that the IPO will be the first listing of a free zone company onshore in the UAE and is open to all citizens and residents of the UAE as well as local and international institutional investors in several countries.

Fertiglobe offers a unique investment opportunity to access an increasingly critical global sector while also benefiting from emerging opportunities in the low-carbon ammonia value chain and the hydrogen economy, according to Jaber.

Fertiglobe was formed in September 2019 as a strategic partnership between OCI (58%) and ADNOC (42%), creating the world’s largest seaborne exporter of urea and ammonia combined, the Middle East and North Africa (MENA) region’s largest producer by production capacity, and an early mover in clean ammonia.

Fertiglobe owns production facilities in the UAE, Egypt, and Algeria.

For his part, Executive Chairman of OCI NV and Vice Chairman of Fertiglobe Nassef Sawiris announced Fertiglobe’s intention to float on the ADX, saying it marks another milestone in Fertiglobe’s growth journey since its creation in 2019.

“As a pure play nitrogen company and an early mover in clean ammonia, it enhances the visibility of Fertiglobe in the marketplace, including its financial performance, attributes that support a robust dividend capacity, commercial positioning, and unlocking of various strategic avenues of growth.”

Global demand for carbon-free ammonia is expected to increase significantly, estimated at 26 million tons by 2030 and 40 million tons in 2035.

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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights

British domestic-focussed mid-cap stocks were the biggest gainers on Friday after the centre-left Labour Party surged to a comprehensive win in a parliamentary election with blue chip stocks, government bond prices and the pound higher.

Hopes that the incoming government will provide a period of economic stability after an often tumultuous 14 years of Conservative Party rule sent the FTSE 250 midcap index (.FTMC), up as much as 1.8% in early trading to its highest since April 2022.

The blue chip FTSE 100 index (.FTSE), was last up 0.2% and the yield on 10-year British government bonds or gilts, dropped 3 basis points to 4.17%, marginally better than other European markets, Reuters reported.

Labour won a massive majority in the 650-seat parliament while Rishi Sunak's Conservatives suffered the worst defeat in the party's long history as voters punished them for a cost of living crisis, failing public services, and a series of scandals.

"A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world," said Ben Ritchie, head of developed market equities at abrdn.

"If the new government gets this right, businesses with significant exposure to the UK economy should be the likely winners - a shot in the arm in particular for companies in the FTSE 250 and FTSE Small Cap".

British home builders stood out, with an index tracking their shares up 2.3%.

"We think the formation of a Labour-majority government will have a positive impact on housebuilders and construction materials," said Aruna Karunathilake, portfolio manager at Fidelity.

"We expect Labour to reinstate housebuilding targets and perhaps also fund investment in local planning departments... That should alleviate builders’ concerns about planning bottlenecks impeding growth in the medium term."

Analysts at Goldman Sachs said that while Labour's manifesto policies imply relatively limited changes to fiscal policy they would modestly boost demand in the near term.

As a result, they raised their forecasts for British GDP growth by 0.1 percentage points in each of 2025 and 2026.