Dubai: Shares of Amanat, whose Initial Public Offering was subscribed nearly 10 times, tumbled more than 20 per cent on its first day of trade on the Dubai Financial Market amid selling pressure in wider Gulf equity markets.
Health care and education start-up Amanat fell to a low of Dh0.79 per share, down 21 per cent, before closing 0.12 per cent lower at Dh0.88. The Dubai Financial Market General Index fell as much as 6.71 per cent at 4,192.70, before closing 4.74 per cent lower at 4,281.43.
“The capital markets are always unpredictable and they get affected by macro-economic drivers like crude oil,” said Faisal Bin Juma Belhoul, chairman of Amanat. “Whoever is buying today is buying at a discount.”
Falling crude oil prices triggered panic selling in equity markets across the Gulf region, with Dubai leading the decline posting a 6.7 per cent fall.
This is the first IPO recently on the DFM, which got listed lower than the offer price. Among other IPOs, Marka’s was the first after a hiatus of five years in Dubai, followed by Emaar Malls Group. The Dubai Financial Market expects to have at least two IPOs before the end of the year, while Abu Dhabi Securities Exchange hopes to have 2-3 IPOs before 2014-end.
“We are anxious to get going. We will have a board meeting very soon to approve of any opportunities that are there,” Belhoul said.
The company has sold 55 per cent of its share capital through the IPO. It plans to deploy 95 per cent of its capital on acquisitions and partnership with existing or under-development companies, and use 5 per cent of capital to establish new ventures.
Amanat plans to announce some acquisitions in the first quarter of 2015. The company plans to acquire 4-6 companies in 18-24 months in the education and health-care segment in the UAE and Saudi Arabia.
“It’s a very important step for the company today to embark on its plans that have been communicated and announced prior to the listing of the company,” Belhoul said.
“As we start to communicate the plans of the company and have the actual deals announced, hopefully the investors will understand the value and that will reflect on the share price of the company,” said Belhoul, adding the company is seeing double digit returns on investments.
Health-care spending in the Gulf is expected to grow at an annual growth rate of 10.7 per cent until 2017, while higher education student enrolment figures are predicted to expand at a 5.2 per cent until 2020.
