Markets

ADX ripe for international investment, say asset managers

December 11, 2024, 2:47 PM

Grocery business Mair Group listed on ADX this week. UAE IPOs raised over $6bn last year

Abu Dhabi top for IPO proceeds
UAE first in GCC for IPOs
Significant potential for growth

The Abu Dhabi Securities Exchange remains a sleeping giant for international investors despite the huge sums raised from recent ADX listings, speakers said this week at the emirate’s annual financial showcase.

There have been 23 notable initial public offerings of UAE companies since the start of 2021 – 14 on the ADX and nine on the Dubai Financial Market.

Although 2024 has been quieter than some previous years, Alef Education raised AED1.89 billion ($514 million) in July, supermarket giant Lulu raised $1.7 billion in November and NMDC Energy raised $877 million from its listing in September.

“Fundamentals are very attractive, but the world hasn’t paid full attention to it yet,” said Rajiv Jain, chairman of GQG Partners.

Jain told Abu Dhabi Finance Week that the Florida-based investment management company, which manages over $150 billion in client assets, has more invested in the UAE capital than in China.

“It’s actually a significant bet,” he said.

The UAE raised the most funds in the GCC through IPOs last year, securing over $6 billion. ADX was the top Gulf bourse in terms of IPO proceeds, making up nearly $5 billion of last year’s regional total.

Abu Dhabi IPO Fund said last month that there would be three further listings before the end of the year, in the financial sector, technology and hospitality.

The exchange has been buoyed by the listing of government-backed entities, particularly a number from Adnoc – Adnoc Logistics and Services’ listing last year raised $2.5 billion.

From the private sector, Investcorp Capital floated 32.85 percent of its total issued share capital in November last year, raising around $451 million.

“The potential for growth in the public markets here in the UAE and Saudi Arabia is significant,” Rishi Kapoor, chief financial officer of Investcorp, told AGBI at Abu Dhabi Finance Week.

Bahrain-based Investcorp has been behind the successful listing of four companies on Saudi Arabia’s Tadawul exchange.

“Certainly over a medium-term horizon from our portfolio in the region the likelihood of us bringing more companies public both in the UAE and Saudi Arabia is high. No doubt. I have no ambiguity in committing to that,” said Kapoor.

The FTSE ADX General Index is down 3.4 percent in 2024 and is 12.9 percent below its all-time high set in November 2022.

Dubai’s index, by contrast, is up 17.7 percent this year and hit a 10-year high in November, although it remains 42 percent below its 2005 peak.

Saudi Arabia’s benchmark is up 1.6 percent in 2024, Qatar is near-flat and Kuwait’s main market index has gained 19.3 percent.