UAE’s IPO drought is likely to ease from this year | GulfNews.com

UAE’s IPO drought is likely to ease from this year | GulfNews.com:

"The IPO activity in the UAE has remained subdued for the past few years, which can be broadly attributed to two factors — firstly and the most important one is the lack of favourable market conditions, and secondly the unfriendly regulatory requirements and procedures. Historically, the UAE stock markets, which have had a relatively drier spell compared to Saudi Arabia, witnessed a total of 10 companies being listed on respective UAE bourses between 2010 and 2014. However, in the last two years, the region was confronted by the declining oil prices and heightened economic uncertainty, which had a significant impact on the IPO activity in the UAE. As a result, there have only been two new additions since 2015 as most of the prospective companies either decided to shelve or defer their IPO plans because of deteriorating market conditions and dismal performance of recent IPOs. The companies listed since 2010 were mostly quasi-government companies, which suggest that capital markets are still elusive of attracting private companies. Moreover, the UAE bourses do not reflect the dynamics of the economy, as the banking, real estate and construction sectors dominate the overall market capitalisation, which undermines other economic sectors, especially in light of UAE’s long term diversification strategy. Hence, there is a lack of peer comparison for private companies operating in other economic sectors, which might be another reason for the subdued IPO activity in the past few years."



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