The value of Emaar Properties jumped by almost Dh3 billion yesterday as investors scrambled to be part of the sale of its retail unit, which includes The Dubai Mall.
A share-buying frenzy boosted Emaar’s market capitalisation to Dh59.23 billion.
Investors yesterday rushed to buy holdings in the developer that owns one of the biggest shopping malls in the world, sending the stock to a six-month high, after it announced intentions to spin off its retail unit. It also proposed a 15 per cent dividend as well as 10 per cent bonus shares.
“What I like in this business is [that it is] exactly what local and international investors want,” said Sebastien Henin, the head of asset management at The National Investor, an Abu Dhabi-based boutique investment bank. “People are ready to die to have access to the retail sector in Dubai due to the fact that this area has strong visibility and growth is exceptional.”
Emaar surged 5 per cent to close at Dh9.10 a share on the Dubai Financial Market, one of the emirate's two stock markets.
More than 46 million shares changed hands yesterday to a value of Dh421 million. That compares to a 15-day moving average of 21.68 million shares. Emaar, regarded a blue-chip among institutional investors, is a candidate for inclusion into MSCI's Emerging Markets Index when UAE shares are incorporated in May.
On Saturday, the developer revealed plans to sell down up to 25 per cent of its retail business in a secondary offering at a value of up to $2.45bn.
A secondary offering is the sale of new stock from a company that has already gone public.
Existing shareholders would be expected to be given priority for allocations, analysts said.
The company said it planned to make use of the funds generated from the public to reward shareholders as dividend distributions.
Mr Henin said there is a real possibility that some of the cash generated will also be used as a cushion for its developments scheduled in the coming quarters, such as projects planned for Dubai Expo 2020.
“It should unlock some value for shareholders and investors will be able to assess each business line separately,” Mr Henin said. “On the one hand there’s the pure real estate line and the other is the recurring income that comes from the malls and the hotels.”
While the move has been welcomed by investors, it has also fuelled speculation over how the transaction will take place in light of the current legal framework.
“So far, the current law and regulation does not allow a sell-down to go public – unless it’s been exempted from current law, ” said Majd Maaiteh, the head of securities at National Bank of Abu Dhabi.
The current framework does not allow for companies listed on the DFM to sell less than 55 per cent to the public, he said. “The other scenario is that the current companies law is subject to being amended that will allow companies to go public by selling down 30 per cent of their capital - but we don’t know when that will be implemented.”
Otherwise, Emaar will have to seek a global depositary receipt on international markets, such as in London or on the Nasdaq Dubai exchange, he added.
If 25 per cent of the company is valued at Dh8bn to Dh9bn, that makes the value of the total retail unit about Dh36bn, and its price to earnings ratio at 16 times, Mr Maaiteh said.
Also, once the company is listed, it will no longer be completely under Emaar’s book and would affect dividends to shareholders and the valuation of Emaar going forward, he said.
“All these things need to be carefully addressed,” Mr Maaiteh added.
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THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5
SQUADS
Bangladesh (from): Shadman Islam, Mominul Haque, Soumya Sarkar, Shakib Al Hasan (capt), Mahmudullah Riyad, Mohammad Mithun, Mushfiqur Rahim, Liton Das, Taijul Islam, Mosaddek Hossain, Nayeem Hasan, Mehedi Hasan, Taskin Ahmed, Ebadat Hossain, Abu Jayed
Afghanistan (from): Rashid Khan (capt), Ihsanullah Janat, Javid Ahmadi, Ibrahim Zadran, Rahmat Shah, Hashmatullah Shahidi, Asghar Afghan, Ikram Alikhil, Mohammad Nabi, Qais Ahmad, Sayed Ahmad Shirzad, Yamin Ahmadzai, Zahir Khan Pakteen, Afsar Zazai, Shapoor Zadran
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
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On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
