Abu Dhabi: NMC Healthcare, an Abu Dhabi-based hospital chain, said it was not looking to dual list on the Abu Dhabi Securities Exchange (ADX) following news late last year that some of the Abu Dhabi-based companies listed in London may dual list.
In an interview with Gulf News, Prasanth Manghat, deputy chief executive officer of NMC, confirmed that the company was never in talks to dual list on ADX.
“At this point in time, we are not at all looking to list in the UAE market. We have not discussed that. We’re not saying that we will never list in ADX, but at this point, we have not discussed it,” he said.
In November 2014, Rashid Al Baloushi, CEO of ADX, said that there were talks to bring some of the Abu Dhabi-based companies listed in London to ADX. However, Al Noor Hospital (one of the three listed in London) denied dual-listing, while Gulf Marine Services (also listed in London) declined to comment.
NMC Healthcare listed 30 per cent of its shares on the London Stock Exchange in April 2012 at a price of £2.1(Dh11.5) per share. Today, share prices stand at around seven pounds, and Manghat said that the returns were used to pay off all the company’s assets (with the exception of the latest in-vitro fertilisation centre in Spain).
Initially, NMC had opted to list in London on the back of stronger access to capital there as the company needed to raise funds to pay its debts. At the time, performance on ADX was much weaker, as the market had not bounced back from the financial crisis.
“I think if we had tried listing in 2007, we might not have gone to London. In the first half of 2014, if we had looked at listing then instead of 2012, we would have done it here,” he said.
Manghat, however, lauded the UAE’s recent law that loosens the rules regarding initial public offerings, reducing the minimum free float of shares from 55 per cent to 30 per cent, saying that it will attract more companies into listing locally rather than in international stock markets.
“The two major hurdles that any businessman faces is parting shares, and parting control. In the UAE, by nature alone, any expatriate who wants to do business has to part 51 per cent of the company. But when you part your shares, people will definitely look at good money return for that. I think this 30 per cent move will definitely be helpful,” he said.
With NMC having been listed on the London Stock Exchange for three years now, Manghat added that proper corporate governance was also need in the UAE’s equity markets in order to boost local listings.
“The other thing is the book-building process, which needs to be brought in. When we went to London, the most important thing we wanted to achieve was the book build because we want our investors to be valued after 35-40 years in the UAE and that could only be done through a proper book build,” the deputy CEO said.
He said he also hoped to see greater diversity on the UAE’s equity markets, which are currently dominated by the banking, construction and insurance sectors.
Discussing the performance of the UAE’s equity markets, Manghat said he expected it to bounce back and that leading companies were not affected by oil prices.
With an increasing number of visitors coming to the UAE, sectors like retail and hospitality are set to grow, leading to improved sentiment among investors, and thus, echoing in the stock market, Manghat said.
“Whatever we see today is a temporary phenomenon. Today, the money is being pulled out, but how long are investors going to hold on to their money?! They [investors] have to come back, and they will, but the most important thing is instilling confidence into them,” he said.
