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The Dubai Financial Market Image Credit: Gulf News File

Dubai: Three companies are preparing initial public offerings for trading on Dubai’s main stock exchange, the bourse said, potentially ending a 17-month IPO drought as it boosts efforts to entice local firms to list domestically rather than abroad.

“We are at different stages of discussions with potential issuers including three companies from the industry, oil and gas services as well as health care sectors,” exchange operator Dubai Financial Market said. The timing of the deals is up to the companies, it said.

Liquidity in Dubai’s main stock market has slumped in the past four years as a drop in oil prices hampered economies across the Gulf, reducing trading volumes and slowing share sales. The last IPO on the DFM was in late 2017, when Emaar Development sold $1.3 billion in new shares. Last week, Dubai-based Network International raised 1.1 billion pounds ($1.4 billion) for a London listing.

The stock exchange is working with local regulators to encourage initial share sales, including enabling companies based in the emirate’s economic free zones to access the market. Two such companies are considering IPOs through an electronic platform that’s in development, according to DFM.

The bourse is looking to increase the representation of tourism, retail, health care and education among listed companies. About 75 per cent of the members of Dubai’s main gauge are from the financial or real estate sectors. The benchmark has gained 11 per cent this year, after a loss of 25 per cent in 2018, its worst performance in a decade.