After a stellar first quarter for UAE stocks, traders and investors say that future initial public offerings will test the appetite for equity markets.
The Abu Dhabi Securities Exchange General Index jumped 14.0 per cent in the period ended yesterday to close at 4,894.42 points.
The Dubai Financial Market General Index surged 32.0 per cent over the same period to close at 4,451.00 points.
“It was a strong quarter in terms of performance on the indices,” said Mohammed Ali Yasin, the managing director at National Bank of Abu Dhabi’s brokerage arm. “It was a continuation of the momentum we saw last year and the distributions from companies were very strong in terms of cash dividends encouraging investors.”
The next period will kick off earnings season and two high-profile public share sales in Dubai.
"Investors will be waiting for companies to confirm the fundamentals to justify the share price gains over the first quarter," Mr Yasin said. "Banks will probably lead the way followed by real estate, with good numbers from Dubai's Emaar Properties and Abu Dhabi-based Aldar Properties. It will give us good ammunition to keep this going in the second quarter."
Analysts expect the retailer Marka to list on the DFM after the company's founders subscribed to 225 million shares.
That works out to 45 per cent of the company’s planned float. The rest of the shares will be sold publicly.
In June, Emaar's retail unit is expected to list on the Nasdaq Dubai exchange. The IPO could be valued at up to Dh9 billion. The developer announced its intention to spin off the retail portion last month amid plans to redistribute some of the money raised as cash dividends and bonus shares to its investor pool.
“Marka is a small IPO so it won’t be a challenge. I wouldn’t be surprised if it’s 10 times oversubscribed,” Mr Yasin said.
"But the major test for the market is Emaar's mall spin-off. I am sure it will have a slowing effect on the secondary market. Pulling out D9bn at once by one company could suck liquidity out anywhere from three to six months."
A comparable IPO on the same exchange would be DP World when it went public in 2007. It was the largest share-sale in the Middle East at the time, raising nearly US$5bn. The company was valued at about $21.6bn.
Nasdaq Dubai does not attract the same kind of liquidity as its peer, the DFM. With few names and currency denomination in dollars, the exchange scares retail investors away from trading stocks such as DP World and the interior fit-out company Depa.
The struggle for trading volumes encouraged DP World to seek a secondary listing in London in 2011. Depa in March last year was reported to have been considering a departure from the exchange as a result of poor trading activity.
“It is a risk,” said Sebastien Henin, the head of asset management at The National Investor in Abu Dhabi. “Liquidity could be an issue, and maybe they can find a way to tackle this by introducing the UAE currency or reducing the nominal value of the shares. The appetite might not be the same in terms of attracting retail investors compared with if it decided to list on the Dubai Financial Market in UAE dirhams.”
UAE stocks are set for inclusion into MSCI’s emerging markets index in May. The benchmark by the index compiler tracks $7.3 trillion in equities around the world.
“We know for a fact that there is billions of dollars coming to the market with the impending MSCI inclusion,” Mr Henin said. “The Emaar listing is unique, where investors have few opportunities from a risk-reward profile to grab a slice of the retail story in Dubai.”
halsayegh@thenational.ae
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WHAT ARE NFTs?
Non-fungible tokens (NFTs) are tokens that represent ownership of unique items. They allow the tokenisation of things such as art, collectibles and even real estate.
An NFT can have only one official owner at one time. And since they're minted and secured on the Ethereum blockchain, no one can modify the record of ownership, not even copy-paste it into a new one.
This means NFTs are not interchangeable and cannot be exchanged with other items. In contrast, fungible items, such as fiat currencies, can be exchanged because their value defines them rather than their unique properties.
Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019
The%20specs
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SPECS
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The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Schedule for Asia Cup
Sept 15: Bangladesh v Sri Lanka (Dubai)
Sept 16: Pakistan v Qualifier (Dubai)
Sept 17: Sri Lanka v Afghanistan (Abu Dhabi)
Sept 18: India v Qualifier (Dubai)
Sept 19: India v Pakistan (Dubai)
Sept 20: Bangladesh v Afghanistan (Abu Dhabi) Super Four
Sept 21: Group A Winner v Group B Runner-up (Dubai)
Sept 21: Group B Winner v Group A Runner-up (Abu Dhabi)
Sept 23: Group A Winner v Group A Runner-up (Dubai)
Sept 23: Group B Winner v Group B Runner-up (Abu Dhabi)
Sept 25: Group A Winner v Group B Winner (Dubai)
Sept 26: Group A Runner-up v Group B Runner-up (Abu Dhabi)
Sept 28: Final (Dubai)
The specs
Engine: 5.2-litre twin-turbo V12
Transmission: eight-speed automatic
Power: 715bhp
Torque: 900Nm
Price: Dh1,289,376
On sale: now
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Fines for littering
In Dubai:
Dh200 for littering or spitting in the Dubai Metro
Dh500 for throwing cigarette butts or chewing gum on the floor, or littering from a vehicle.
Dh1,000 for littering on a beach, spitting in public places, throwing a cigarette butt from a vehicle
In Sharjah and other emirates
Dh500 for littering - including cigarette butts and chewing gum - in public places and beaches in Sharjah
Dh2,000 for littering in Sharjah deserts
Dh500 for littering from a vehicle in Ras Al Khaimah
Dh1,000 for littering from a car in Abu Dhabi
Dh1,000 to Dh100,000 for dumping waste in residential or public areas in Al Ain
Dh10,000 for littering at Ajman's beaches
Company%20profile
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KILLING OF QASSEM SULEIMANI
THE CARD
2pm: Maiden Dh 60,000 (Dirt) 1,400m
2.30pm: Handicap Dh 76,000 (D) 1,400m
3pm: Handicap Dh 64,000 (D) 1,200m
3.30pm: Shadwell Farm Conditions Dh 100,000 (D) 1,000m
4pm: Maiden Dh 60,000 (D) 1,000m
4.30pm: Handicap 64,000 (D) 1,950m
MATCH INFO
Manchester United 6 (McTominay 2', 3'; Fernandes 20', 70' pen; Lindelof 37'; James 65')
Leeds United 2 (Cooper 41'; Dallas 73')
Man of the match: Scott McTominay (Manchester United)
The biog
Year of birth: 1988
Place of birth: Baghdad
Education: PhD student and co-researcher at Greifswald University, Germany
Hobbies: Ping Pong, swimming, reading
Fifa Club World Cup:
When: December 6-16
Where: Games to take place at Zayed Sports City in Abu Dhabi and Hazza bin Zayed Stadium in Al Ain
Defending champions: Real Madrid
In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
- 150 tonnes to landfill
- 50 tonnes sold as scrap metal
800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
25 staff on site
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The specs
Engine 60kwh FWD
Battery Rimac 120kwh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power 204hp Torque 360Nm
Price, base / as tested Dh174,500
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