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UAE capital markets set for ‘significant growth’, says regulator

UAE capital markets Reuters/Ben Job
Abu Dhabi Securities Exchange could list 13 companies in 2023
  • 11 initial public offerings in pipeline in the UAE
  • IPOs in Dubai in 2022 included Dewa, Tecom, Salik and Empower
  • Dubai Financial Market US roadshow to attract increased investment

If 2022 was a year of recovery from the economic effects of the coronavirus pandemic, then 2023 will witness “significant growth” in the UAE capital markets.

Mohamed Khalifa Al Hadari, deputy CEO of the Emirates Securities and Commodities Authority, told the inaugural Mena IPO Summit in Dubai that there are 11 initial public offerings (IPOs) “waiting in the pipeline” in the UAE, with a total value exceeding AED8 billion ($2.2 billion).

This includes four free zone companies and two special purpose acquisition companies.

The Abu Dhabi Securities Exchange could also list 13 additional companies in Abu Dhabi alone this year, including four from outside the UAE.

“The current flurry of activity is more sustainable than the previous IPO booms as it is part of the wider well defined government strategy to expand diversity to supply the markets,” Al Hadari said.

This follows a busy year for IPOs in Dubai, where government-related and private sector issuers, including Dewa, Tecom, Salik, Empower and Taaleem, were all listed on Dubai Financial Market (DFM).

Dewa raised $6 billion from its IPO offering last year, making it the biggest equity capital markets deal. 

Dewa’s IPO formed part of Dubai’s plans to list 10 state-owned entities to increase the size of the DFM to AED3 trillion, as well as set up a AED2 billion market maker fund to encourage the listing of more private sector companies from a broader range of sectors such as logistics and retail.

UAE capital markets
Mohamed Khalifa Al Hadari, deputy CEO of the Emirates Securities and Commodities Authority

Al Hadari said the rise in IPO activity will “increase the depth of local capital markets”, while attracting more retail investors and increasing liquidity. It will ultimately make the country “even more attractive” to overseas investors.

Dubai ranked first regionally and 17th globally among 190 countries in the Global Financial Centres Index published by Doing Business 2022.

With total international investor trading accounting for 49 percent of activity on the DFM last year this represents a year-on-year increase of 3 percent compared to 2021 and a notable climb from 16 percent in 2013.

Hamed Ali, CEO of DFM and Nasdaq Dubai, revealed that the Dubai bourse welcomed 155,000 investors onto its marketplace in the first nine months of 2022, compared to approximately 3,700 for the entire year in 2021.

Earlier this month the DFM concluded a roadshow in the US as it looks to attract increased international investment. This included 82 meetings with senior representatives of 35 global institutions managing more than $1 trillion of assets. 

The United Nations Conference on Trade and Development’s World Investment Report 2022 found the UAE attracted $21 billion in foreign direct investment (FDI) in 2021, up from $20 billion in 2020.

While it remained the number one FDI recipient in the Gulf and ranked 19th globally it was beaten by regional rival Israel, with $30 billion.

Ali revealed there are currently 617 FDI projects in Dubai worth around $7.2 billion, placing the Emirate in the number one position globally.

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