The Supreme Committee for the Development of Capital Markets and Exchanges in Dubai round-tabled the latest Dubai Financial Market review, and the results speak for themselves.
Byline Asim Alkhouly
First Deputy Ruler of Dubai HH Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum says that Dubai is on track to becoming the most important destination globally in the financial services sector and among the four most important global financial centres in line with Dubai’s stated Economic Agenda.
“The achievements of the Supreme Committee for the Development of Capital Markets and Stock Exchanges in Dubai are part of our comprehensive development vision for capital markets and stock exchanges. We are continuing to achieve the ambitious visions of Mohammed bin Rashid to make Dubai among the top four global financial centres,” says HH Al Maktoum.
The Dubai Financial Market (DFM) in 2023 was a standout performer after the index level exceeded 4,000 points for the first time in eight years, as a result of strong gains in listed shares, increased demand from international investors, in addition to new listings of companies. These factors combined contributed to increasing the depth of the market, enhancing its investment attractiveness, as well as attracting new segments of investors and institutions.
This achievement is driven by a significant increase in trading activity, capital inflows, an increase in the number of new investors, the launch of the IPO Accelerator Program, and several innovative market initiatives. The DFM has attracted around 230,000 new investors since 2022, thanks to the varied investment options offered to investors.
The DFM now ranks fifth globally in the rate of increase of the market index compared to other global market indices in 2023, after it was ranked 15th in 2020, as a result of the strength of the listed companies, and the high confidence in market indices. It also achieved record results in 2023, with a market capitalization growth rate of about 75% to reach AED 688 billion (USD 188 Bil) since the establishment of the committee, thanks to the positive price movement and the performance of the index.
The proceeds of IPOs since 2021 amounted to AED 34.5 billion, while the value of more than 155 bonds and sukuk listed on the Dubai Financial Market and Nasdaq Dubai amounted to about AED 484 billion. Dubai became one of the main destinations globally for listing Sukuk worth AED 316 billion, while the percentage of institutional investors trading reached about 58% in 2023.
The most prominent project undertakings includes: the launch of the market maker (xCube) worth two billion dirhams, the launch of the xCube trading application, the issuance of green bonds and sukuk worth $ 27 billion, the launch of a new public index for the Dubai Financial Market with S&P Dow Jones, in addition to the launch of the pilot carbon credits program, the launch of the IPO Accelerator Program and the organization of the IPO Summit.
Last year, the Law Enforcement Committee for Capital Markets in Dubai was established, giving a boost to market confidence. LECCM is responsible for developing financial procedures and supervising capital markets, accelerating the pace of business, monitoring violations and enforcing laws, in addition to establishing a virtual asset regulatory authority, establishing a specialized court (Securities Disputes Department) to adjudicate disputes related to shares, bonds or other securities, as well as issuing 16 approved legislative changes for local markets.
Eight new listings including the Dubai Electricity and Water Authority (DEWA) come onto the DFM, making it the largest listed company in the market by market capitalization, the second largest listing in the region, and the largest ever in the history of the UAE capital markets.
DEWA’s offering included the sale of 9 billion shares, representing 18% of its issued capital, for a total of AED 22.3 billion, with the Government of Dubai retaining an 82% stake in the company’s issued capital.
TECOM Group was also listed following a successful IPO, which saw the highest coverage in the history of IPOs on the DFM.
TECOM’s IPO attracted strong demand for qualified institutional and retail investors in the UAE, with applications received amounting to AED 35.4 billion, resulting in a total coverage of the amount of shares offered by more than 21 times as per the final price. Through this offering, TECOM raised AED 1.7 billion.
Union Coop’s shares were also listed as the first consumer cooperative in the UAE and the total value of its shareholders’ equity exceeded the AED 3 billion barrier, achieving a cumulative annual growth rate of 20.5% for net profits between 1984 and 2021, while the cumulative annual growth rate of sales was 16.85%.
The DFM also witnessed the listing of SALIC, a leading regional toll regulator and the exclusive operator of toll gates in Dubai. The company’s shares began trading under the symbol “SALIK” as the culmination of the successful public offering of its shares, as the strength of investment demand prompted the company to raise the offering ratio to 24.9% of the capital shares (equivalent to 1,867,500,000 shares at a price of two dirhams). per share) instead of 20% as planned in advance.
The total value of applications received reached AED 184.2 billion, 49 times more than the value of the offered shares, reflecting the strong demand for SALIC shares from various investor categories.
Emirates Central Cooling Systems Corporation (Empower), the world’s largest district cooling services provider and the most prominent player in the sector in Dubai, was also listed.
The company’s shares began trading under the symbol “EMPOWER” as a culmination of the successful public offering of its shares, which raised AED 2.66 billion, bringing the company’s market capitalization to AED 13.30 billion at the time of listing, and the share price in the IPO reached AED 1.33, the upper end of the price range, noting that the strength of investment demand prompted the company to increase the size of the offering by 100% following the full coverage of the IPO on the first day.
The total value of subscription applications received amounted to AED 124.69 billion, exceeding the value of the offered shares by 47 times. Empower’s shares are traded in the Public Utilities sector of the DFM.
Dubai Taxi Company has seen significant demand from international and regional institutional investors and retail investors in the UAE, with total demand for the IPO reaching more than AED 150 billion (equivalent to about USD 41 billion), which means exceeding the expected IPO level by 130 times.
Taaleem Holding Group, one of Dubai’s largest education service providers, also listed, which has a portfolio of 26 schools and more than 27,000 students.
The IPO of Al Ansari Financial Services Group raised about AED 770 million through the sale of 750 million shares at AED 1.03 per share, becoming one of the first family companies to be listed Dubai. It exceeded the target value in the subscription level by 22 times. Total demand for shares exceeded AED 12.7 billion.
Parkin, Dubai’s largest provider of paid parking facilities and services, also announced the price range for its shares and the start of the subscription period for its initial public offering on the DFM. The price range for the offering is between AED 2 and AED 2.1 per share; the market capitalization when listing the value of the shares ranges from AED 6 billion to AED 6.3 billion (AED 1.63 billion to $1.72 billion).
