Business | Markets
Government firms benefit from public listing
The public listing of government controlled companies helps in the efforts to acquire foreign assets in the US and Europe, senior executives said at a conference last week.
- By Ahmed A. Elewa, Staff Reporter
- Published: 23:33 February 8, 2008
Abu Dhabi: The public listing of government controlled companies helps in the efforts to acquire foreign assets in the US and Europe, senior executives said at a conference last week.
The reason is that political sensitivity, such as those prevailing in the US which prevented DP World from acquiring P&O's assets there, can diminish, or even be avoided by the disclosure and transparency requirements for listing.
Peter Barker-Homek. chief executive of Abu Dhabi National Energy Company (Taqa), said: "Countries have the right to know the rationale behind investments from foreign entities, and if they are convinced they will be happy to accommodate the business," he added.
The rating of Taqa by international credit rating agencies such as Moody's and Standard & Poor's has helped as well, while the transparency required towards the public shareholders resulted in a clear picture about the business and its objectives, according to Barker.
Nevertheless, the history of other sovereign wealth funds (SWFs), such as Abu Dhabi Investment Authority and Mubadala, provide for a safety valve, as the international business community has been observing the patterns of these funds for a long time.
"Were it not for the subprime crisis the chances for a Middle East based SWF to acquire a stake in Citigroup were much less, yet these funds have been around for a while, and this explains what they are all about," said Julian Mylchreest, head of Citigroup's investment banking for Central Eastern Europe, Middle East and Africa region.
"Adia stands today on more than $875 billion worth of funds, equivalent to 461 per cent of the UAE's Gross Domestic Production," said Karim Al Solh, CEO of Gulf Capital.
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