Abu Dhabi Bourse In Talks Over Four Potential IPOs, Two This Year

Abu Dhabi Securities Exchange (ADX) is in discussions with four companies about listing on the index, with two potentially taking place before the end of the year, ADX Chief Executive Rashed al-Baloushi said on Monday.

Should the listings go ahead, they would the first on the exchange since 2009.

New flotations on the bourse had been held back by low investor confidence after the index slumped in the wake of the global financial crisis and a local real estate crash, as well as an unfavourable regulatory regime that pushed Abu Dhabi companies to seek listings in London.

But with the economy of the wider United Arab Emirates, of which Abu Dhabi is the largest constituent, rebounding and the ADX recovering ground lost after the crash, sentiment has improved to the point where new listings are possible.

“We are cooperating with other companies that we know are going to go public. We are expecting a couple of them to be listed on the ADX before the end of this year,” Baloushi told reporters on the sidelines of an investment event in Dubai.

Baloushi wouldn’t be drawn on the names of the four companies with which it is holding talsk, though he said that the two that could list this year are in the financial sector.

One of these could be private equity firm Gulf Capital, which has mandated Bank of America-Merrill Lynch to arrange a share sale on the ADX before the end of the year, according to banking sources. However, the sources weren’t aware if Gulf Capital inrtends to list itself or one of its funds.

WIDER SELECTION

Baloushi said that the ADX is working to broaden the type of companies that make up the Abu Dhabi bourse. It is dominated by banks and other financial services firms, accounting for about 58 per cent of the market’s value.

The exchange is focusing on attracting firms from four sectors of the economy – retail, education, healthcare and petrochemicals.

“We are aiming to have those sectors represented on our market. If we have those, we believe we will have an exchange representative of the economy,” Baloushi said.

Two leading Abu Dhabi healthcare businesses have listed in the past two years – NMC Health and Al Noor Hospitals – but both chose a London listing because of unfavourable rules in Abu Dhabi, most notably the provision that companies must list at least 55 per cent of their share capital.

Baloushi said that a proposed new companies law, which reduces the minimum free float to 30 per cent, would change this.

The long-awaited law is awaiting ratification by the UAE President, the country’s economy minister said in March.