DP World has raised nearly $5 billion (£2.4 billion) in an initial public offering, making it the biggest Middle East share sale to date.
The Dubai port operator priced shares for its float at $1.30 each yesterday, valuing the state-owned shipping giant at $21.5 billion, according to company figures. The listing marks the most significant move yet by Dubai’s ruling Maktoum family to diversify the emirate’s economy away from dwindling oil resources towards tourism, trade and capital markets.
With the share sale already oversubscribed as much as 15 times, analysts said that the listing reflected increased investor confidence in the emerging Middle Eastern market.
Jason Goff, head of group treasury and markets sales for Emirates Bank International, said: “The extreme level of interest in this stock represents a real sea change and it shows how successful Dubai has been in marketing itself to the rest of the world.”
Mohammed Sharaf, chief executive of DP World, credited the float’s success in part to its decision to bypass the London Stock Exchange in favour of a listing on the Dubai International Financial Exchange (DIFX). The two-year-old bourse was set up to comply with international regulatory standards, but it has languished against competing exchanges in London and New York. The DP World listing is the first time that a leading domestic company has chosen to list exclusively on DIFX and marks a significant boost for the fledgling exchange.
DIFX, in which the Nasdaq exchange has agreed to take a 33 per cent stake, lists 11 companies, all of which also float shares elsewhere. “We chose this market because it created some added excitement to this listing. We wanted to share our success locally, with the rest of Dubai,” Mr Sharaf said. “There was a very strong demand for the shares from international investors.”
Dubai has ambitions to transform itself into a leading financial markets centre and DP World’s float marks a milestone in achieving that goal.
There is mounting speculation that Dubai’s ruling family plans to float a string of other state-owned companies, with Emirates Airline widely believed to be the next in line.
“We are paving the way. It is something others will be looking at,” Mr Sharaf said.
He said that proceeds from the DP World float 3.8 billion shares, equivalent to 23 per cent of the company would go to repay a loan that was raised last year to buy the British company P&O.
The funds will also be used to fuel an ambitious expansion plan, under which the shipping giant would more than double its capacity in the next decade.
DP World is the world’s fourth-largest ports operator, managing 42 ports, including Southampton and Tilbury in England, in 22 countries. The company plans to expand operations in the Far East, the Indian sub-continent and the Middle East, where ports are especially congested.
Per Larsson, chief executive of Bourse Dubai, the holding company behind the DIFX and DFM stock exchanges, has described DP World as an “anchor listing” that would encourage others to follow suit.
Soud Ba’alawy, executive chairman of Dubai Capital, the investment arm of Dubai Holding, which owns 20 per cent of Bourse Dubai, has said that there were more than 400 companies that could go public in the region with a market cap of between $5 billion and $20 billion. Source
The Dubai port operator priced shares for its float at $1.30 each yesterday, valuing the state-owned shipping giant at $21.5 billion, according to company figures. The listing marks the most significant move yet by Dubai’s ruling Maktoum family to diversify the emirate’s economy away from dwindling oil resources towards tourism, trade and capital markets.
With the share sale already oversubscribed as much as 15 times, analysts said that the listing reflected increased investor confidence in the emerging Middle Eastern market.
Jason Goff, head of group treasury and markets sales for Emirates Bank International, said: “The extreme level of interest in this stock represents a real sea change and it shows how successful Dubai has been in marketing itself to the rest of the world.”
Mohammed Sharaf, chief executive of DP World, credited the float’s success in part to its decision to bypass the London Stock Exchange in favour of a listing on the Dubai International Financial Exchange (DIFX). The two-year-old bourse was set up to comply with international regulatory standards, but it has languished against competing exchanges in London and New York. The DP World listing is the first time that a leading domestic company has chosen to list exclusively on DIFX and marks a significant boost for the fledgling exchange.
DIFX, in which the Nasdaq exchange has agreed to take a 33 per cent stake, lists 11 companies, all of which also float shares elsewhere. “We chose this market because it created some added excitement to this listing. We wanted to share our success locally, with the rest of Dubai,” Mr Sharaf said. “There was a very strong demand for the shares from international investors.”
Dubai has ambitions to transform itself into a leading financial markets centre and DP World’s float marks a milestone in achieving that goal.
There is mounting speculation that Dubai’s ruling family plans to float a string of other state-owned companies, with Emirates Airline widely believed to be the next in line.
“We are paving the way. It is something others will be looking at,” Mr Sharaf said.
He said that proceeds from the DP World float 3.8 billion shares, equivalent to 23 per cent of the company would go to repay a loan that was raised last year to buy the British company P&O.
The funds will also be used to fuel an ambitious expansion plan, under which the shipping giant would more than double its capacity in the next decade.
DP World is the world’s fourth-largest ports operator, managing 42 ports, including Southampton and Tilbury in England, in 22 countries. The company plans to expand operations in the Far East, the Indian sub-continent and the Middle East, where ports are especially congested.
Per Larsson, chief executive of Bourse Dubai, the holding company behind the DIFX and DFM stock exchanges, has described DP World as an “anchor listing” that would encourage others to follow suit.
Soud Ba’alawy, executive chairman of Dubai Capital, the investment arm of Dubai Holding, which owns 20 per cent of Bourse Dubai, has said that there were more than 400 companies that could go public in the region with a market cap of between $5 billion and $20 billion. Source
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