Nasdaq Dubai
Nasdaq Dubai has the mandate to oversee the running of the new stock exchange for SMEs. Image Credit: Gulf News Archive

Dubai: Dubai has launched a new stock market for small and mid-sized companies - the Nasdaq Dubai Growth Market. It will enable fast-growing companies to achieve a "cost-effective" listing and forms part of the Dubai Future District project. Nasdaq Dubai will have the mandate to operate the new entity, which was launched as per a directive from Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai. It will host companies from the UAE as well as those from outside looking to expand in the region.

Nasdaq Dubai intends to launch the Growth Market in early 2021. SMEs can list if they are valued below $250 million, and a minimum operating history of one year is required compared to three years for Nasdaq Dubai’s main market. “The launch of Nasdaq Dubai Growth Market is a strategic step that will support this vital sector by opening new horizons for its companies and providing them with investment resources to expand their business and enhance their attractiveness in global markets," Shaikh Hamdan said in a statement.

$250million

Businesses wanting to list on the SME exchange need to be valued at below $250 million

Like Nasdaq Dubai, the Growth Market will allow owners to carry out the IPO while selling "as little as" 25 per cent of the shares in their company.

Make alternative plans

Those companies not ready for an IPO will be able to join the 'Private Market' segment of NDGM. Here, a company’s shares are held for safekeeping in Nasdaq Dubai’s Central Securities Depository (CSD). "This is designed to give confidence to investors and moves the company into an exchange environment ahead of a potential listing," the statement added.

"The Growth Market is set to play a key role in the future of capital-raising and the channeling of investment to enterprising companies," said Essa Kazim, Governor of Dubai International Financial Centre and Chairman of Dubai Financial Market.

Nasdaq Dubai is working with government bodies, free zones and expert advisory companies as partners to launch the Growth Market. The advisors will include financial advisory firms, investment banks, law and accounting firms, which will provide tailored support including pre-IPO awareness and readiness exercises.