Dubai: The Initial Public Offering (IPO) pipeline would regain momentum after confidence returns, the Abu Dhabi Securities Exchange (ADX) chief executive officer said.
The IPO pipeline has been slack after the Dubai index fell 20 per cent from its high weighed down by weak oil prices. The IPO market peaked in 2014, when many companies from Amanat, Marka, and Emaar Malls Group listed on the UAE bourse.
“Companies are hesitant about going public right now,” Rashed Al Blooshi, chief executive of Abu Dhabi Securities Exchange said in a statement, “but once the right time comes, there will be a big opportunity for investors to invest in this IPO cycle”.
Al Blooshi voiced his confidence that the challenges weighing on the world’s markets would be “overcome very soon”.
Al Blooshi highlighted the ADX’s efforts to make the IPO process quicker and more efficient through streamlining and technical improvements, by means of the ADX-eKtetab, the electronic IPO platform provided by the ADX.
ADX-eKtetab has been especially designed to provide active support for electronic services of the capital markets in regards with completion of the subscription and listing process in conformity with the latest systems adopted by world stock markets.
ADX-eKtetab would enable investors to fill electronic IPO applications available at the subscription website to save time and efforts, lower errors and ensure accuracy of information.
Positive impact
He also noted the positive impact of upgrading the ADX to the Emerging Markets status by both the MSCI index (Morgan Stanley Capital International) and the S&P Dow Jones in 2014. Al Blooshi also observed that the ADX was classified as an “Emerging Market” by FTSE index in 2009, and in 2011 by S&P and Russell Investments indexes.
The upgrade is instrumental in supporting the ADX’s bid to become the preferred choice for capital markets in the region. “Being part of the emerging markets requires us to fulfil key criteria, which we want to do, so, by default, we will develop the infrastructure of the market, together with procedures and rules,” he told Global Platform. Further benefits, Al Blooshi added, included greater exposure for the ADX on the international stage and a major investment boost, which was sufficient to “stabilise the stock market and increase liquidity”. “About 1,000 new institutional investors came to the ADX right after the MSCI’s announcement and, today, we are hence talking about 5,000 foreign institutional investors at the exchange,” he noted.
