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Nasdaq Dubai to encourage free zone IPOs

Pact ensures sustainability for free zone SMEs
Nasdaq Dubai and Economic Zones World have entered into an agreement paving the way to provide equity financing opportunities for companies based in the free zone.

Under the agreement both parties have agreed to identify companies based in Jafza that may benefit from carrying out an initial public offering (IPO) on the Dubai exchange .

The agreement supports the Dubai Government's strategic objective of promoting a favourable environment for the growth of international and regional companies and providing them convenient access to capital markets to fund their development.

Jafza will work closely with Nasdaq Dubai to provide companies with information and support and jointly host workshops and training to support listing plans by suitable companies.

The collaboration is expected to boost Jafza 's existing investment framework. In addition to raising capital to finance growth, a company in Jafza can enhance and sustain its business standing by meeting the exchange's international listing standards. As part of efforts to create a holistic framework, Jafza also plans to explore new debt financing options and instruments for its clients.

The agreement was made through a memorandum of understanding (MoU) signed by Salma Hareb, CEO of Economic Zones World , the parent company of Jafza , and Jeff Singer, Chief Executive of Nasdaq Dubai , in the presence of Essa Kazim, Managing Director and Chief Executive of DFM and Talal Al Hashimi, Managing Director, UAE Region, Economic Zones World .

Hareb said: "Convenient access to capital and financing options are of paramount importance to our customers. We consistently aim to provide optimal solutions and facilities that ultimately enable our customers to grow successfully. This agreement with a reputable national financial body reaffirms this objective. Moreover, as Dubai entities, Nasdaq Dubai and Jafza seek to leverage each other's strengths to achieve Dubai's economic objectives."

Singer said: " Jafza hosts many of the region's most dynamic enterprises and Nasdaq Dubai is excited to be working with EZW to promote listing opportunities for them. The exchange offers company owners the opportunity to sell shares at market value through a book build IPO, with active trading on a liquid platform used by 77 companies listed on DFM as well as Nasdaq Dubai .

"We look forward to discussing IPO possibilities with small and medium-sized enterprises in Jafza as well as larger companies, including subsidiaries of foreign entities."

Benefits for Jafza companies will include formal briefings on eligibility requirements for listing as well as the procedures involved that enable companies to comply with Nasdaq's global standards. Furthermore, the collaboration with the exchange ensures sustainability for companies in the free zone particularly the smaller investors and SMEs.

Nasdaq Dubai published proposed changes to its listing rules in January 2011, aimed at increasing liquidity on the exchange and attracting small and medium-sized enterprises, including family companies. The exchange is currently consulting market participants about the proposed changes.

© Emirates 24|7 2011