Listing aviation firms on UAE bourses to push up liquidity: experts

Abu Dhabi – Mubasher: The UAE aviation sector experts have welcomed the General Civil Aviation Authority’s (GCAA) plans to float stakes of the national airlines on the local stock markets.

This move will boost investor confidence in the twin UAE stock markets, enhance liquidity and attract further overseas investment, they said.

The initial public offerings (IPOs) of the local aviation firms will help investors offset losses caused by the financial crises of the UAE-based firms, topped by the ailing private equity firm Abraaj Group, which drove traders to sell their equities over the previous period, aviation insiders told Mubasher.

The share sale of the domestic airlines on the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) will contribute to luring more investors, Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI), said.

This step will also add a fresh sector to the bourses, he added, expecting the possible IPOs to reduce speculations on weak stocks.

Al-Taha further indicated that the Dubai government-owned carrier, Emirates, is currently the best one to be floated on the local stock markets on the back of its robust financial position and the expected heavy liquidity that is to be generated by its listing.

International institutions

In the same vein, the IPOs of the national aviation firms on the UAE stock markets will contribute to diversifying investment-dominated sectors, such as the real estate, banking and insurance, MindCraft Consultants’ CEO Fadi Al Ghattis said.

Al Ghattis forecast the new share sales will lure foreign investors.

Translated by: Mohammad Hesham Azab