Dubai: Al Ansari Financial Services' stock was up a near 20 per cent in the initial moments of its listing on Dubai Financial Market. The stock priced at Dh1.03 is now at Dh1.22 on volumes of 40 million shares traded within the first two minutes.
Retail investors had been in the vanguard of the offering from Al Ansari, a family-owned business that floated 10 per cent as part of the process. The company derives the bulk of its revenues from remittances and is the dominant player in the UAE market with more than 30 per cent share.
The impression is that the post-listing response to Al Ansari will be a major piece of the conversation as other Dubai and UAE based family businesses consider an eventual transition to going public. And it comes close to the listing on ADX by Presight Ai, the G42-owned high-tech services company, which zoomed to a 179 per cent gain on its first day.
In the year-to-date, DFM is down 6.5 per cent while the ADX is lower 7 per cent, according to Kamco Invest number tracking. Much of that stemmed from recent jitters coming in from the crisis that hit the banking sector, as well as the drop in oil prices. The latter is now back into climb mode, and which will reflect on index gains too.
- Dubai's Al Ansari Financial Services IPO pulls Dh12.7b as subscriptions, dividend yield at 7.8%
- Will Al Ansari IPO get other family businesses to follow?
- Watch: Al Ansari Financial Services sets IPO range at Dh1-Dh1.03; National Bonds comes as cornerstone investor
- Dubai's Al Ansari Financial Services raises IPO size for retail investors to 7.5%
"Al Ansari and Presight represent the polar opposites of what represents the UAE economy," said Sameer Lakhani, Managing Director at Global Capital Partners. "Yet, both underline the growth potential prospects, which is why there has been strong demand. The success of Al Ansari will act as a catalyst for other family-operated enterprises - but also attract overseas investors in search of value propositions."
Ahead of its IPO, Al Ansari in media interactions emphasized that the traditional ways of remittances will still hold up even as sending funds through digital platforms wins more users. A new report from Visa found that digital remittances actually leading in the UAE, as banks compete head on with remittance houses on making the whole process as convenient as possible.
Spreading its bets
For Al Ansari, much will depend on the additional Gulf markets that it can get into, beyond the UAE and Kuwait where it is represented. It is in the process of taking full equity control of the Kuwait operations, and that should offer a further lift to top-line numbers in future. But which would be the next market for expansion? Market watchers talk about Saudi possibilities, but there has been no confirmation from the company.
Late last year, the company sold its real estate interests to its parent company, Al Ansari Holding. The other sale-back was in Al Ansari Financial Brokerage, which was providing services on DFM and ADX. (Al Ansari has confirmed BHM Capital Financial Services as ‘liquidity provider’ for its stock on DFM.)
Al Ansari had generated a net profit of Dh595.29 million last year, against Dh491.21 million the year before.
Who's up for UAE's next IPO?
There are media reports of an upcoming one from an ADNOC entity, while the industrial giant - EGA - has been rated as a strong possibility for some time now. A stock offering from Lulu, the hypermarket group, keeps getting talked about.
There are also analysts who believe that a healthcare company could be the next big one, with the sector getting heightened interest from institutional investors. As of now, there is Burjeel Holdings already on ADX.