Dubai Advances in Doubling Financial Market in Wake of DEWA, TECOM’s Successful IPOs

Dubai aspires to benefit from the success of the DEWA and TECOM’s IPOs by listing more companies and attracting international capital. (AFP)
Dubai aspires to benefit from the success of the DEWA and TECOM’s IPOs by listing more companies and attracting international capital. (AFP)
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Dubai Advances in Doubling Financial Market in Wake of DEWA, TECOM’s Successful IPOs

Dubai aspires to benefit from the success of the DEWA and TECOM’s IPOs by listing more companies and attracting international capital. (AFP)
Dubai aspires to benefit from the success of the DEWA and TECOM’s IPOs by listing more companies and attracting international capital. (AFP)

Dubai prepares to list more government and semi-government companies on the Dubai Financial Market (DFM).

This decision is driven by the great success achieved by listing the Dubai Electricity and Water Authority (DEWA) in April, as well as the successful IPO of TECOM Group, a subsidiary of Dubai Holding, and the high turnout by investors to subscribe to the group's shares, in particular, and the IPO of Dubai companies and institutions, in general.

The listing of DEWA and TECOM raised about AED24 billion ($6.5 billion), while they drew orders worth almost AED350 billion ($95.2 billion).

These figures reflect the huge success and the confidence in Dubai’s institutions and companies that seek through their strategies to upgrade the capital markets and increase their ability to attract investors.

Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, has recently issued a law to establish road toll operator “Salik”' as a Public Joint Stock Company (PJSC).

This enables listing some of its shares in the DFM and is considered a major step as part of Dubai government’s strategy to enhance and develop the market’s performance by listing a number of companies in the future.

Salik is part of the Roads and Transport Authority (RTA) in Dubai. The road toll system was launched in 2007 by the RTA to ease traffic congestion on the Sheikh Zayed highway and shore up state revenues.

Salik has eight toll gates and three million registered vehicles, out of which 1.8 million are registered in Dubai, according to the Dubai Media office.

The upcoming period is expected to witness more listings on the DFM, which would enhance its position and attractiveness to investors.

This comes in line with Sheikh Mohammed’s vision to achieve an economic and development renaissance in Dubai in particular, and the UAE in general, and to acquire a diversified, sustainable, more competitive and flexible economy based on knowledge and innovation.

A report on Wednesday said the great success achieved in TECOM’s IPO reflects the global investors’ great confidence in Dubai’s economy and its major institutions and infrastructure.

TECOM’s Global Offering drew substantial demand from both the Qualified Institutional Offer and UAE Retail with total gross demand reaching AED35.4 billion ($9.6 billion), implying an oversubscription level of over 21 times in aggregate at the final price.

It had previously announced setting the final offer price for its IPO at AED2.67 ($0.72) per share.

The UAE Retail Offer achieved an oversubscription level of almost 40 times in aggregate, making it the highest oversubscription multiple ever for IPOs on the DFM.

As a result of the extremely strong demand, the final offer price was set at the top of the price range and the company has raised AED1.7 billion ($462 million) through the IPO.

TECOM houses more than 7,500 companies and 10 large business complexes including Dubai Internet City and Dubai Media City.

In this context, DEWA attracted in April AED315 billion ($85.7 billion) of demand for the IPO, with buyers including sovereign wealth funds, private fund and 65,000 individual investors.

DEWA said in its prospectus the 18% share sale by the Dubai government was aimed at boosting trading liquidity in the stock market and raising its own profile with international investors.

The shares began trading on the DFM on April 12, with DEWA the largest company on the bourse with a market capitalization of AED124 billion ($33.8 billion).

Demand for DEWA’s IPO has been strong, prompting it to first raise the size of the institutional offer and then boosting the retail portion by almost three times on Saturday.

Dubai's deputy ruler, Sheikh Maktoum bin Mohammed, in November announced plans to take 10 government-linked companies public to boost stock market activity to three trillion dirhams (about $817 million).



Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
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Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)

Lebanese officials hope to meet international bondholders to talk about restructuring debt in the next 12 months but are not planning any meetings at the World Bank/IMF Spring meetings next week, finance minister Yassin Jaber said on Tuesday.

Jaber spoke to Reuters just days before travelling to Washington for the Spring meetings - one of the biggest gatherings for financial policy makers and investors - where Lebanon will seek to show it has made progress on economic reforms to address the underlying causes of its financial crash.

Lebanon's economy began unravelling in 2019 after years of corruption and profligate spending by the country's ruling elite, and tipped into a sovereign default on its $31 billion of outstanding international bonds in March 2020.

Asked whether he planned to meet international bondholders in the next year, Jaber said, "definitely, definitely, this is as they say the elephant in the room."

"You can't escape it in the end. Lebanon is keen to resolve this issue, God willing," he said.

But the country needed to make progress on reforms - including reforming the banking sector and boosting government revenues through reforms to tax systems and customs collection - before it could start talks, Jaber said.

"We wanted, first of all, to do our homework, to put the whole reform process on the right track to get started. You can't have a house in total disorder and then say, 'I want to negotiate,'" he said.

The Lebanese delegation to the spring meetings will be the first outing at an IMF/World Bank meeting for Lebanon's new government, which took the reins in February and pledged to seek a new IMF programme. Jaber said it would be the first time a Lebanese finance minister attends in more than a decade.

Economy Minister Amer Bisat is scheduled to give an outlook on Lebanon's economy at a JPMorgan investor conference held on the sidelines, according to documents seen by Reuters.

The creditor group - which includes the heavyweight funds Amundi, Ashmore, BlackRock, BlueBay, Fidelity and T-Rowe Price as well as a group of smaller hedge funds - has recently appointed a financial advisor in preparation for debt talks.

Shortly after the bondholder group originally formed in 2021, it said it held a "blocking stake" of more than 25% across a number of Lebanon's bonds, making it a critical player in any debt restructuring.

The chunk of the bonds are also held by domestic commercial banks or the Lebanese central bank, which bought $3 billion of debt directly from a previous government in 2019.

Lebanon's bonds trade at deeply distressed levels of around 15-16 cents in the dollar. However, that is a sharp uptick from the single digits they traded in before Israel's military campaign badly weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming Lebanon's political paralysis.

In January, Lebanon's cabinet extended the statute of limitations on legal action over Eurobonds for another three years. Jaber said the move "reassured the bondholders".