Shares in Dubai’s biggest utility surge on market debut

Shares of Dubai’s state-owned power company soared with their market debut on Tuesday, following the largest initial public offering in the region since Saudi Aramco began plans to revive capital markets through a series of privatizations.

Dubai Electricity and Water Authority shares soared 23% before ending a 16% rise after a $ 6.1 billion IPO. The supplier of the water and electricity monopoly to the 3.5 million residents of the emirates almost tripled the size of the share sale to 18% thanks to strong demand, with orders worth $ 86 billion from domestic and international investors.

“Dewa is a great company in the protected sector, which is also pushing bells for Dubai, so this is a safe bet,” said Miguel Azbado, head of Citigroup’s investment banking in the Middle East and Africa. “Investors love the combination of protecting the downside along with Dubai’s secular growth.” City, along with Emirates NBD and HSBC in Dubai, managed the sale of the shares.

The IPO, the second largest in the world this year, is expected to follow further partial privatization of state-owned assets, including Tecom’s business parks, the Salik toll system and Empower, a refrigeration services provider.

The government is building on a series of IPOs reviving Dubai’s financial market, which lagged behind regional levels in Riyadh and Abu Dhabi, where volumes and valuations soared after a number of state-owned and private-sector listings.

The center of commerce, transportation and tourism has witnessed an increase in the activity of new residents thanks to its successful navigation in the plague, and keeps its economy more open than its counterparts. The financial services sector has also grown rapidly and the city is presenting itself in line Regulation Center for Cryptographic Currencies.

The war in Ukraine provoked another movement Flow of Russian cash Into Dubai. The United Arab Emirates remained neutral, resisting pressure to condemn Russia, with which it has developed close ties in recent years, particularly through a common oil policy within the Opec + group of producers.

Population growth is at the heart of Dewa’s growth prospects, whose market value is $ 39 billion after its debut. The population of the emirates is expected to grow to almost 6 million by 2040.

The government has announced plans to issue 10 government companies, with the remaining six yet to be announced. Officials also say private companies are considering listings.

“The message here is that DFM can create demand to compete in all regional markets and offer potential issuers liquidity,” said Muhammad Fahmi, co-head of investment banking at EFG Hermes, one of the bookrunners’ companies. “The level of demand should give consolation to future issuers, both from the government and from the private sector.”

Shares in Dubai’s biggest utility surge on market debut Source link Shares in Dubai’s biggest utility surge on market debut

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