It has been rough sledding for the DIFC lately. First NASDAQ abandoned the DIFX project to the DFM. This reduced NASDAQ from a partner in the development of Dubai as a financial center to a passive and very minor shareholder in the DFM. Bourse Dubai still owns substantial stakes in the NASDAQ and the LSE but may be forced to sell them if it can’t roll its’ debt in February. Not much has changed functionally, NASDAQ did not contribute much aside from the brand and the management and though the exchange has launched derivatives they have not realized their potential but symbolically its’ a blow.
Then came the news that Dubai Ports World, the star listing of the DIFX would seek a dual listing in London. It had been a major triumph that the DIFX had been able to play host to the DPW IPO as a single listing. At the time, back in 2007 DPW was the largest IPO in the history of the Gulf States and was also the first privatization for Dubai which, had it been followed by others, might have alleviated or perhaps prevented altogether much of the suffering that is about to befall Dubai. The fact that DPW is also seeking a London listing is a sign of the desperation of Dubai to raise the equity value as well as a sign of the failure of the DIFC.
As tragic as these things are, readers of my blog will know that these issues are not what I consider to be the main issue of within the DIFC, but more on that in a moment.
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