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Investing in a secure future
Strength of Emirates and DP World indicates the success of the UAE economy - one that is emulated by some, and followed closely by others.
- Gulf News
- Published: 23:51 October 29, 2007
The growth rate of various economic projects in the UAE has certainly set a precedent in the region - one that is emulated by some, and followed closely by others.
This is not surprising given the magnitude and expansion rate of some of the entities that are overseeing such projects. This perspective should obviously be seen keeping in mind the strides that the country's economy has made in the past and the future plans it intends to venture in.
The most recent indication of the success achieved by some of the state-owned entities is the possibility of offering part of their shares in an initial public offering (IPO).
The news reports of Emirates airline possibly considering and eventually offering an IPO should be perceived within this context. Almost a week earlier, DP World had also announced that it would sell off 20 per cent of its stake in an IPO. In both cases, an IPO would enable the listing of the shares on the Dubai International Financial Exchange (DIFX).
The idea of offering shares of government-owned entities should be examined from a more general perspective. Companies such as DP World and Emirates are successful national entities. A public offering of shares of similar companies implies that firstly, the levels of operations have transcended beyond the local level and that secondly, it reflects an ambitious future expansion plan. For instance, DP World's flotation is estimated to be the largest in the entire Middle East.
But most important of all is the fact that the price of the shares which the public would be willing to pay would define that company's positioning in the market, as much as how it would carry out its business in the future. It would also reflect a healthy and promising state of the UAE's economy.
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