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).



Honda and Nissan Start Merger Talks in Historic Pivot

Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
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Honda and Nissan Start Merger Talks in Historic Pivot

Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon

Honda and Nissan have started talks toward a potential merger, they said on Monday, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to some of the world's best known car makers, Reuters said.
The integration would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD.
The merger of the two storied Japanese brands - Honda is Japan's second-largest automaker and Nissan its no. 3 - would mark the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52 billion deal.
Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining, the companies said. The chief executives of all three companies held a joint press conference in Tokyo.
"The rise of Chinese automakers and new players has changed the car industry quite a lot," Honda CEO Toshihiro Mibe told the press conference.
"We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten," he said.
The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said.
They aimed to wrap up talks around June 2025 and then set up a holding company by August 2026, at which time both companies' shares would be delisted.
Honda has a market capitalisation of more than $40 billion, while Nissan is valued at about $10 billion.
Honda will appoint the majority of the holding company's board, it said.
Combining with Mitsubishi Motors would take the Japanese group's global sales to more than 8 million cars. The current No. 3 group is South Korea's Hyundai and Kia .
Honda and Nissan have been exploring ways to bolster their partnership, including a merger, Reuters reported last week.
The two companies said in March they were considering cooperation on electrification and software development. They agreed to conduct joint research and widened the collaboration to Mitsubishi Motors in August.
Last month, Nissan announced a plan to cut 9,000 jobs and 20% of its global production capacity after sales plunged in the key China and U.S. markets. Honda also reported worse-than-expected earnings due to declining sales in China.
Like other foreign carmakers, Honda and Nissan have lost ground in the world's biggest market China to BYD and other local brands that make electric and hybrid cars loaded with innovative software.
In a separate online press conference with the Foreign Correspondents Club of Japan on Monday, former Nissan chairman Carlos Ghosn said he did not believe the Honda-Nissan alliance would be successful, saying the two automakers were not complementary.
Ghosn is wanted as a fugitive in Japan for jumping bail and fleeing to Lebanon. His 2018 arrest for financial wrongdoing pitched Nissan into a crisis.
French automaker Renault, Nissan's largest shareholder, is open in principle to a deal and would examine all the implications of a tie-up, sources have said.
Taiwan's Foxconn, seeking to expand its nascent EV contract manufacturing business, approached Nissan about a bid but the Japanese company rejected it, sources have told Reuters.
Foxconn decided to pause the approach after it sent a delegation to meet with Renault in France, Bloomberg News reported on Friday.
Shares in Honda ended the day up 3.8%, Nissan rose 1.6% and Mitsubishi Motors gained 5.3% after the news reports on the details of the planned merger, while the benchmark Nikkei closed up 1.2%.