Dubai’s IPO haul hits Dhs34.5bn in three years

Image courtesy: Francois Nel/ Getty Images

Initial public offerings (IPOs) in Dubai raised a record $9.4bn (Dhs34.5bn) since 2021, as privatisations and monetisation initiatives, stock market rallies and soaring energy prices are ensuring that investor demand for share sales in the emirate remains high.

The Dubai Securities and Exchange Higher Committee said investor demand for IPOs over the past three years reached more than Dhs1tn.

Dubai Financial Market’s (DFM) robust IPO momentum propelled its general index to the fifth position globally in 2023, attracting 230,000 new investors since 2022, according to the state-run Dubai Media Office.

The DFM General Index, delivered “exceptional performance” last year, crossing the 4,000-point mark for the first time in eight years. The index’s performance is attributed to a surge in trading activities, heightened capital inflows, and a notable influx of new investors.

“The accomplishments of the committee in advancing capital markets have played a crucial role in fostering growth and consolidating Dubai’s position on the global financial stage, aligning with our comprehensive vision for the emirate,” said Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance of the UAE.

Sheikh Maktoum said the emirate’s ambition to position itself among the world’s top four financial hubs is aligned with the Dubai Economic Agenda D33.

DFM’s market capitalisation surged to Dhs688bn in 2023 from Dhs582bn a year earlier.

Dubai’s continued listing activity is also driven by implementing various initiatives such as an enhanced digital platform and introducing an IPO accelerator programme.

Dubai’s hot IPO streak

Among the biggest IPOs in the emirate was utility giant Dubai Electricity and Water Authority (DEWA), which raised Dhs22.3bn in April 2022 – the biggest listing in Europe, the Middle East or Africa since Saudi Aramco raised almost $30bn in late 2019.

Roads & Transport Authority’s taxi and parking businesses are the latest entities to go public in the emirate.

Dubai Taxi Company soared as much as 19 per cent in its debut after a $315m IPO while Parkin, which oversees public parking operations in the city, raised $429m after pricing its shares Dhs2 and Dhs2.10 apiace.

Parkin is the sixth privatisation by the Dubai government as part of a plan, unveiled at the end of 2021, to list 10 state-owned companies as the emirate seeks to deepen its capital markets.

GCC equity capital markets enjoyed a strong finish to 2023 and the region’s strong showing stands in sharp contrast to many other major IPO markets, from the US to Europe and China. EY said 26 out of the 48 IPOs in the GCC region showed a positive return compared to their listing price at the end of 2023.

The region remains one of the few bright spots in global IPO markets – a trend that is expected to continue with as many as 29 companies across various sectors considering listing in 2024, with Saudi Arabia and the UAE leading the way in terms of expected volumes.

Read: Parkin IPO: UAE retail offering increased on strong demand