24 April 2013
By the end of this year, the equity capital market in the UAE will get a boost through new fund-raising as well as increased trading values, a senior investment banker told Zawya.
"There are a few candidates for IPO by the end of the year," Mohammed Ali Yasin, managing director at NBAD Securities, said on the sidelines of the Zawya Fund Management Conference and Awards in Dubai.
"Last year, there was a deal on Noor Hospital. Its private equity owners are likely to seek an exit. Pricing is the issue," Yasin told Zawya.
The UAE market is also waiting for the Arabtec Holding rights issue in May this year.
In December, a Reuters report said that the private equity consortium that owns half of Abu Dhabi healthcare provider Al Noor Medical was reviving plans to sell its stake through a stock market listing in 2013. The group, including Dubai-based Ithmar Capital and Qatar First Investment Bank, was "looking for new advisers after dropping HSBC Holdings and JP Morgan Chase, following an aborted previous listing", Reuters reported citing three unnamed sources.
"The IPO will be a test for the market. Healthcare will be a sector that investors will be happy to be a part of. Going back to the insurance and the financial sectors, which are over-saturated does not anymore make sense to them. Besides healthcare, petchems and industrials might be the other sectors of interest," Yasin said.
Trading value is expected to increase to AED 120 billion by the end of 2013, Yasin added, a 35% to 40% growth.
"Total trading value on the Dubai and Abu Dhabi stock markets was AED 520 billion in 2008. It then went down to AED 57 billion in 2011. In 2012, it started to move up and reached about AED 74 billion. So 2011 could be probably seen as the bottoming out of the UAE markets. Today, we have crossed the AED 40 billion mark already in the year to date. We expect trading value to be AED 100-plus billion by the end of the year.
"With IPOs, the figure could up to even AED 110 billion or AED 120 billion. The liquidity exists, but it is sitting on the sidelines," Yasin said.
The UAE is not the only bright spot in the equity firmament. Yasin also sees some movement in Saudi Arabia.
"Saudi is a hotspot market. I have seen some internationals interested in being part of healthcare in Saudi Arabia. Kuwait has done very well in the GCC and is third in ranking (in terms of market performance to date unless the political situation changes); Dubai is first on the list followed by Abu Dhabi. This year, I see the MSCI [upgrade for UAE to "emerging market" status] and Expo 2020 as market changers."
Last month, Nadine Sharrouf, IPO analyst at Zawya, wrote about the region, "As always, we can look to Saudi Arabia to be the market's savior amid speculations of two more IPOs to be launched in the coming months. A UAE comeback is also a welcome treat for flotation-hungry investors, with companies such as DAMAC Properties already revealing plans to enter the public market. Qatar, Oman and Tunisia might also be among the issuing countries this year, while the pending IPO of Iraqi telecom companies Zain Iraq and Korek Telecom are expected to turn the tables in terms of the value of capital raised, if it follows the footsteps of Asiacell."
Sharrouf also cited the spate of good news from Saudi Arabia starting with Dallah Healthcare going public (end 2012), the IPO of Northern Region Cement Company (beginning 2013) and the February IPO of the National Medical Care Company. "The last IPO saw huge demand and was seven times oversubscribed," she noted.
Back home in UAE, Dubai construction firm Arabtec said in March that it has picked Bank of America Merrill Lynch and National Bank of Abu Dhabi as bookrunners to manage two rights issues designed to raise a combined AED 4.66 billion. The two issues, one this year and one in 2014, will raise AED 2.385 billion each.
© Zawya 2013
By the end of this year, the equity capital market in the UAE will get a boost through new fund-raising as well as increased trading values, a senior investment banker told Zawya.
"There are a few candidates for IPO by the end of the year," Mohammed Ali Yasin, managing director at NBAD Securities, said on the sidelines of the Zawya Fund Management Conference and Awards in Dubai.
"Last year, there was a deal on Noor Hospital. Its private equity owners are likely to seek an exit. Pricing is the issue," Yasin told Zawya.
The UAE market is also waiting for the Arabtec Holding rights issue in May this year.
In December, a Reuters report said that the private equity consortium that owns half of Abu Dhabi healthcare provider Al Noor Medical was reviving plans to sell its stake through a stock market listing in 2013. The group, including Dubai-based Ithmar Capital and Qatar First Investment Bank, was "looking for new advisers after dropping HSBC Holdings and JP Morgan Chase, following an aborted previous listing", Reuters reported citing three unnamed sources.
"The IPO will be a test for the market. Healthcare will be a sector that investors will be happy to be a part of. Going back to the insurance and the financial sectors, which are over-saturated does not anymore make sense to them. Besides healthcare, petchems and industrials might be the other sectors of interest," Yasin said.
Trading value is expected to increase to AED 120 billion by the end of 2013, Yasin added, a 35% to 40% growth.
"Total trading value on the Dubai and Abu Dhabi stock markets was AED 520 billion in 2008. It then went down to AED 57 billion in 2011. In 2012, it started to move up and reached about AED 74 billion. So 2011 could be probably seen as the bottoming out of the UAE markets. Today, we have crossed the AED 40 billion mark already in the year to date. We expect trading value to be AED 100-plus billion by the end of the year.
"With IPOs, the figure could up to even AED 110 billion or AED 120 billion. The liquidity exists, but it is sitting on the sidelines," Yasin said.
The UAE is not the only bright spot in the equity firmament. Yasin also sees some movement in Saudi Arabia.
"Saudi is a hotspot market. I have seen some internationals interested in being part of healthcare in Saudi Arabia. Kuwait has done very well in the GCC and is third in ranking (in terms of market performance to date unless the political situation changes); Dubai is first on the list followed by Abu Dhabi. This year, I see the MSCI [upgrade for UAE to "emerging market" status] and Expo 2020 as market changers."
Last month, Nadine Sharrouf, IPO analyst at Zawya, wrote about the region, "As always, we can look to Saudi Arabia to be the market's savior amid speculations of two more IPOs to be launched in the coming months. A UAE comeback is also a welcome treat for flotation-hungry investors, with companies such as DAMAC Properties already revealing plans to enter the public market. Qatar, Oman and Tunisia might also be among the issuing countries this year, while the pending IPO of Iraqi telecom companies Zain Iraq and Korek Telecom are expected to turn the tables in terms of the value of capital raised, if it follows the footsteps of Asiacell."
Sharrouf also cited the spate of good news from Saudi Arabia starting with Dallah Healthcare going public (end 2012), the IPO of Northern Region Cement Company (beginning 2013) and the February IPO of the National Medical Care Company. "The last IPO saw huge demand and was seven times oversubscribed," she noted.
Back home in UAE, Dubai construction firm Arabtec said in March that it has picked Bank of America Merrill Lynch and National Bank of Abu Dhabi as bookrunners to manage two rights issues designed to raise a combined AED 4.66 billion. The two issues, one this year and one in 2014, will raise AED 2.385 billion each.
© Zawya 2013
