Adnoc L&S expected to get $200m capital boost after inclusion in MSCI Emerging Markets Index

Adnoc Logistics & Services has become the latest UAE company to be included in the MSCI Emerging Markets Index, with the move expected to help it attract more than $200 million in passive capital inflows.

The inclusion is effective from November 25, Adnoc L&S said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.

MSCI's Emerging Markets Index is tracked by investors managing trillions of dollars in assets. The benchmark is designed to measure the performance of large and mid-cap stocks across 24 emerging markets and had more than 1,190 constituents as of October-end.

Adnoc awards $14.7bn in contracts to domestic suppliers

Read More

Index inclusion usually supports increased liquidity for a company’s shares and can help to attract more regional and global institutional investors.

Adnoc listed companies target record Dh158 billion in dividends by 2030

01:09

The move comes after Adnoc's $317 million secondary offering in August, which raised Adnoc L&S's free float to about 22 per cent from 19 per cent and "quadrupled average daily trading volumes", the statement said.

The sale of 222 million shares in Adnoc L&S to institutional investors, which was oversubscribed about seven times, was aimed at boosting the logistics unit's case for inclusion in the MSCI index.

The offering "significantly broadened the company’s institutional investor base, laying the foundation for enhanced index visibility", Adnoc L&S said on Thursday.

"This milestone reflects growing investor confidence, enhances access to international capital, and supports our strategy to scale operations, unlock diversified revenue streams, and deliver superior, long-term shareholder returns," said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S.

Inclusion in the MSCI emerging market index is expected to help the company attract more than $200 million in passive capital inflows, supporting liquidity and global access, Adnoc L&S said, citing broker estimates.

The company is the fourth in Adnoc group to be included in the index, following Adnoc Distribution, Adnoc Drilling and Adnoc Gas.

Other UAE companies that are already part of the index include Salik, the Dubai Water and Electricity Authority, First Abu Dhabi Bank, Emaar Properties, e&, Emirates NBD, Aldar Properties and Abu Dhabi Commercial Bank.

Adnoc L&S made its debut on the Abu Dhabi bourse in June 2023 after parent company Adnoc raised about Dh2.83 billion ($771 million) from the sale of a 19 per cent stake in the subsidiary.

The company delivers energy products and solutions to more than 100 customers in about 50 countries through its three business units, including integrated logistics, shipping and marine services.

It currently has 23 new build vessels under construction, with deliveries scheduled through 2028.

This expansion is projected to generate more than $10 billion in long-term revenue, the company said. It also has more than $26 billion in long-term contracted revenue.

Adnoc L&S, which reported a 10 per cent annual rise in its second-quarter net profit to about $229 million, announced full-year dividend guidance of $325 million for this year, nearly 20 per cent higher than last year.

The company is targeting cumulative dividends of $2.2 billion by 2030.