United Arab Emirates companies have stepped up follow-on equity offerings in recent weeks, with proceeds nearing $5 billion this year and surpassing initial share sales.
The surge reflects a push by firms to broaden their investor base and strengthen chances of inclusion in global emerging-market indexes, according to bankers. Abu Dhabi’s benchmark’s 6% gain this year and Dubai’s 15% rally have also helped lure international investors.
Abu Dhabi’s Mubadala Investment Co. is paring its stake in Dubai-listed telecom operator Du in a multi-day sale that could raise up to $920 million. The sovereign wealth fund also pledged to take up its full entitlement in Abu Dhabi Commercial Bank PJSC’s upcoming $1.7 billion rights issue. Mubadala is the bank’s largest shareholder with just under 61%.
Other Abu Dhabi government-related entities have also tapped equity markets in recent weeks. G42, the emirate’s main artificial intelligence company, raised $100 million by selling shares in Presight AI Holding Plc. Abu Dhabi National Oil Co. got $317 million by trimming its holding in its logistics arm — its second sell-down this year.
“International investor appetite has been on the rise, and this has led UAE GREs to take advantage by monetizing value through secondary equity sales,” said Majed Al Mesmari, head of Middle East and North Africa investment banking at Jefferies Financial Group Inc., which helped lead the Presight deal.
Including the Du deal, UAE follow-ons are nearing $4.75 billion this year, close to triple 2024’s volumes, driven largely by government-linked sellers. By comparison, just $905 million has been raised through initial public offerings.
Still, the sums are small relative to global markets. Follow-on offerings have totaled about $235 billion in the US this year, $15.7 billion in London despite an IPO slump, and $6.3 billion in Hong Kong, according to data compiled by Bloomberg.
The wave of secondary sales has also added some selling pressure in the broader market, as investors free up cash to participate in deals, said Ahmed Kamal, a portfolio manager at Azimut. Meanwhile, shares of Adnoc Logistics and Services, Presight, and Du have slipped between 1% and 4%.
For Du, the transaction is aimed at boosting liquidity and positioning the stock for potential index inclusion, Chief Financial Officer Kais Ben Hamida told Bloomberg TV. He said the deal had drawn “excellent feedback” from both international and local investors.
Private companies may soon follow state-backed peers, said Prasad Chari, senior managing director for equity capital markets at Emirates NBD Capital, which is arranging the Du deal.
The current market backdrop “presents compelling opportunities for well-managed private companies seeking to optimize their capital structures and enhance liquidity,” he said.
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