Dubai: Dubai’s benchmark index extended gains on Sunday led by Arabtec and Emaar Properties, whose unit’s initial public offering (IPO) was subscribed by investors from Sunday. The Abu Dhabi index, meanwhile, fell.
The Dubai Financial Market General Index rose 0.61 per cent to end at 4,991.23 after swinging between gains and losses earlier in the session. Arabtec rose 3.84 per cent, while Emaar Properties rose 2.27 per cent, after losing more than 2 per cent last week.
Emaar Properties has sought to raise up to Dh5.8 billion by selling 2 billion shares.
“The price range translates into the valuation Dh32.5-38 billion and I think at Dh38 billion, it is seen trading at around 30 times PE [price earnings] for 2014 profits, which is higher than average of Emaar Properties and higher than DFM,” said Mohammad Ali Yasin, managing director of NBAD Securities.
“So, I believe it will be a successful IPO, and the company will have some room for the shares to go up after the IPO,” Yasin said.
About Dh5.3 billion of the proceeds will be allocated as dividend payments to the shareholders of Emaar Properties.
“This move is positive. It adds more value to Emaar shares rather than Emaar mall shares,” Yasin said.
“The appetite is very strong and we see good demand from institutional going forward,” said Yasin, adding “we expect very good book building process and see subscription of more than 100 times.”
At least 70 per cent of the Emaar Malls offering will be allocated to qualified institutional investors and 30 per cent to individuals. A minimum 10 per cent will be earmarked for Emaar shareholders as of Sept. 10, while the Emirates Investment Authority reserved 5 per cent of the offering allocated to institutions.
On the index, out of a total of 27 shares traded on the exchange, shares of 12 companies declined, shares of 10 rose, while shares of the rest 7 companies remained unchanged.
Among the other top gainers were Al Salam Sudan, which rose 4.14 per cent among others.
In Abu Dhabi, the general index ended 0.40 per cent lower at 5,159.67. Out of a total of 31 companies, shares of four companies rose, while 13 of them declined and the other 14 remained steady.
Insurance firm National Takaful Company fell the 7 per cent in trade, while Union National Bank fell more than 3 per cent.
