IPOs boost Abu Dhabi’s bourse despite stock sell-off

Reuters/Ben Job

• Adnoc subsidiary listings offset slump in stock trading
• Abu Dhabi Exchange turnover and volumes fell overall
• Dubai Financial Market up amid renewed property boom

The market capitalisation of the Abu Dhabi Securities Exchange rose by $43.7 billion in the first half of 2023.

The listings of two Abu Dhabi National Oil Company (Adnoc) subsidiaries more than offset a sustained decline on the bourse’s index and a slump in stock trading.

Since late 2021, a flurry of initial public offerings (IPO) that sold small stakes in Abu Dhabi government-owned businesses has swelled the combined value of listed firms on the UAE capital’s stock market.

• Adnoc Logistics & Services shares surge on debut
• Abu Dhabi’s Adnoc Gas shares up 18% on debut
• UAE stock markets surge $60bn in value in H1 2023

The pace of the UAE’s part-privatisation drive has slowed in 2023 – both in Abu Dhabi and Dubai – as soaring interest rates and global economic wobbles make buying equities less attractive versus the safer alternative of putting cash in interest-paying savings accounts.

Nevertheless, state-owned Adnoc raised AED9.1 billion ($2.5 billion) by selling 5 percent of Adnoc Gas in a March IPO that valued the subsidiary at AED181.9 billion.

As of June 26, the bourse’s most recent trading day, Adnoc Gas was worth AED236.4 billion.

Another unit, Adnoc Logistics and Services, joined the Abu Dhabi Securities Exchange (ADX) on June 1 after completing a $769 million IPO that offloaded 19 percent of its shares.

Its current market value is AED22.6 billion.

These listings, along with the IPO of Abu Dhabi government-backed firm Presight AI, enabled the bourse’s combined market value to reach AED2.78 trillion on June 26, bourse data shows.

That compares with AED2.62 trillion on December 31, 2022; its combined value rose by AED160 billion, or $43.7 billion, in the first six months of this year.

The increase occured despite the bourse’s index dropping 6.5 percent over the same period.

The benchmark is down 10.2 percent since hitting an all-time closing high in mid-November 2022.

ADX stock trading totalled AED171.7 billion in the first half of 2023 as 27.6 billion shares changed hands.

In the prior-year period, 34.3 billion shares worth a combined AED211.3 billion were traded.

As such, bourse turnover and volumes fell 18.7 and 19.5 percent respectively, according to AGBI calculations based on ADX data.

Dubai Financial Market

The Dubai Financial Market General Index, in contrast, is up 13.9 percent this year, hitting an eight-year high in late June as banking and real estate stocks led gains amid a renewed property boom in the emirate.

The bourse’s market capitalisation is currently AED652.1 billion, according to the UAE state-owned news agency WAM.

That is up 12 percent from AED582 billion as of December 31, the DFM’s latest annual report states.

As well as rising stock prices, the bourse’s overall value was also boosted by Al Ansari Financial Services’ AED773 million IPO.

The March flotation, which sold 10 percent of its shares, valued the company at AED7.73 billion.