Why UAE stock markets can expect to see increased IPO activity in 2021 - Arabianbusiness
Recent changes to business legislation in the UAE are expected to lead to an increase in the number of initial price offerings (IPOs) on the country's stock markets.
Several new initiatives were launched in the UAE in 2020 with the aim of bolstering IPO activity in the years ahead, according to Ernst & Young, commonly known as EY, one of the largest professional services networks in the world.
Key among these are the amendments to foreign ownership and listing requirements, EY said, adding that the changes significantly alter regulations concerning commercial companies, removing the historical requirement to have 51 percent UAE ownership.
The regulation changes also extend to IPO activity and mergers and acquisitions. The founders of private joint-stock companies may now sell up to 70 percent of their capital by way of a public offering, up from 30 percent previously.
This upper limit, however, may be exceeded with the consent of the UAE’s Securities and Commodities Authority.
“The 2020 amendments to the Companies Law bode well for the overall development of capital markets in the UAE. Increased flexibility in foreign ownership, changes to the nationality requirements of board members and the increase in the proportion of share capital that owners may now sell, to name a few, are expected to lead to an increase in the number of IPO candidates in the emirates,” said Alison Hubbard, MENA law leader, EY Law.
