Dubai hopes to seize private sector listings, boost access to stock exchange

Dubai’s stock exchange is working on expanding private sector listings and plans to boost access for both institutional and retail investors, its chief executive said on Tuesday.

“Being able to attract the private sector to the market is the key and we think we can,” Ali said, adding it was what he and his team spend most of their time on.

Gulf governments have been trying to encourage more family-owned companies to list in a bid to deepen their capital markets, with Saudi Arabia so far seeing the most success.

Dubai, the region’s financial hub, saw nearly $8.5 billion in proceeds from five IPOs in 2022, according to Refinitiv data.

Dubai’s government has pledged to list 10 state-linked firms to boost stock market activity. Four went public last year: utility firms Dubai Electricity and Water Authority (DEWA) and Empower, business park developer Tecom Group and road toll operator Salik .

Taaleem, a private sector education firm that has some government support, also went public.

“We had four, which means there are six more that will come, whenever those entities are ready to announce or the government is ready to announce,” Dubai Financial Market CEO Hamed Ali told Reuters, without giving a timeline and declining to name them.

Market watchers have said possible Dubai state-linked IPOs could include energy company ENOC and airport services provider dnata, while the Dubai government and those companies have made no public comments.

DFM is working to enhance liquidity – a key market concern – and boost market participation, including by bringing in “institutionally focused funds” and “a diverse range of brokerage firms”, Ali said.

Asked if the price performance of last year’s IPOs would impact possible future listings, Ali said they have performed “relatively well, relative to international markets, and the reason behind that is that these are companies that are still paying dividends.”

On whether they could continue to promise dividends in a rising interest rates environment, Ali said he could not speak on the companies’ behalf.

“However, what I can tell you, if you look at the stories that came into the market, they are crown jewel stories. These are companies that we’re confident about.”

($1 = 3.6729 UAE dirham)