Money exchange firm Al Ansari Financial Services PJSC rose in its trading debut, as Dubai’s first initial public offering this year further signaled the Middle East’s emergence as a bright spot for share sales.
(Bloomberg) — Money exchange firm Al Ansari Financial Services PJSC rose in its trading debut, as Dubai’s first initial public offering this year further signaled the Middle East’s emergence as a bright spot for share sales.
Shares of Al Ansari soared as much as 20% before paring some gains to close 17% higher at 1.2 dirhams ($0.33). The stock had priced at 1.03 dirhams per share, at the top end of the marketed IPO range, which valued the firm at around $2.1 billion.
Read more: Al Ansari Owners Raise $210 Million in Dubai’s First IPO of 2023
The Middle East has seen continued appetite for offerings at a time when recession concerns, high inflation and rate hikes by central banks have damped investor sentiment in the global IPO market. Recent debuts in the oil rich countries have seen oversubscribed books, including that of the region’s operator of KFC and Pizza Hut outlets and Adnoc Gas, the year’s biggest listing.
Al Ansari is one of the first family-owned businesses to go public in the United Arab Emirates, of which Dubai is a part. Last year, listings in the city raised a combined $8.5 billion amid a privatization drive that sought greater trading volumes to match IPO activity in neighboring Abu Dhabi and Riyadh. Most of the offerings in Dubai were of state-owned firms.
“This is a discussion that a lot of family members are having behind closed doors,” Group Chief Executive Officer Rashed Ali Al Ansari said. Going public could help firms of a certain size and scale to continue to grow, and the longevity of such larger family-owned businesses is important for the UAE, he said.
There are signs that more private and family-owned companies are considering listing. Emerging Markets Property Group, which operates classifieds websites popular with expatriates in the United Arab Emirates, is considering an IPO, Bloomberg reported last week.
The Al Ansari IPO attracted total demand of more than 12.7 billion dirhams, including a 200 million-dirham commitment from cornerstone investor National Bonds Corp. Excluding the cornerstone tranche, the IPO was oversubscribed about 22 times.
Abu Dhabi Commercial Bank, EFG Hermes and Emirates NBD Capital managed the offering.
(Adds CEO quote in fifth paragraph, updates share move)
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