Tecom Dubai buildings
Illustrative purposes Image Credit: Gulf News

Two months after the hugely successful initial public offering (IPO) of power provider DEWA on the Dubai Financial Market, the just-concluded IPO of business district operator Tecom has proved a hit with investors.

The company said it had raised Dh1.7 billion ($463 million) from its IPO on the DFM. The IPO was 21 times oversubscribed, with more than Dh35 billion in the total gross demand for the shares. The final price of the share is set at Dh2.67.

The Tecom IPO came shortly after the successful DEWA offering in April, which was 37 times oversubscribed, making it the second-largest IPO in the history of the region. The success of the two offerings reflects the confidence investors, local and foreign, have in the UAE economy, its sustainable growth and vast prospects.

There is a clear appetite for investment in the UAE economy, the second-largest economy in the Arab world. Despite the enormous challenge of the pandemic and the Ukraine conflict and its impact on commodities and the supply chain, the UAE economy is poised to grow by 5.4 per cent this year, according to the central bank. Moreover, investment in its financial markets is expected to grow exponentially as more state-owned companies are listed on DFM.

The Dubai government last year announced plans to list 10 state-owned companies as part of a strategy to double the size of the capital market to Dh3 trillion and attract foreign investment. The plan, announced by Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance last November, includes a listing of companies in the energy, logistics and retail sectors. The plan was initiated a month later with the listing of Emirates Central Cooling Systems Corporation (Empower), the world’s largest District Cooling Services provider, on the DFM.

All economic indicators underscore the stability of the country’s economic environment and its resilience. The Tecom IPO was the latest demonstration of investors’ confidence in the national financial ecosystem. They are not just investing in a single company, a successful one such as DEWA or Tecom; they are investing in the future of one of the best-performing economies in the world.