UAE is said to establish new rules for startups IPOs . . . . . . . . . . . THE STOCK MARKET regulator of the United Arab Emirates (UAE) is said to be considering new rules that would make it more difficult for startup companies to make an initial public offering (IPO), according to people familiar with the matter. Bloomberg reported on Monday that people with knowledge said the Emirates Securities and Commodities Authority (SCA) rules will be applied that will only allow applications from startups in sectors not represented on the STOCK EXCHANGES of the UAE, and those with strategic importance to the economy. The reported change in regulation comes after a number of so-called Greenfield IPOs in the UAE in 2014, where these companies which have no operating track record went public in order TO RAISE MONEY at small values, usually a dirham a share to fund their business plans. The Dubai Financial Market (DFM) is up 10% for the year, and in September the index had gained more than 50% before the oil-driven tumble in UAE and regional equities. This has lured more companies to go public in 2014, and is prompting plans for next year. IPOs in the UAE garnered $3.74 billion from share sales in 2014, up from $774 million in 2013, of which $1.58 billion raised by the Emaar Malls Group in September. Daman investments PSC is set to sell 55% of its equity in the first quarter of 2015, the company’s chairman said in November. Emaar Properties in September disclosed plans to list its HOTELS UNIT in 2015. However, the most recent of these IPOS, the Dubai Parks & Resorts and Amanat Holdings came at a time of major volatility in the market. Dubai Parks and Amanat fell 9% and 12% respectively just on the first day of trading. The Abu Dhabi Securities Market on the other hand, which was last up 6%, has not seen a single IPO since 2011. Greenfield listings mean that those companies are not obliged to file financial records for previous years, as these companies depend on the presence of established investors. The UAE STOCK MARKET and its equities have strong fundamental strength and are backed by a solid, well-diversified economic background, and even with the strong gains, the high liquidity and the irrationality of investors when dealing with the market are damaging it. A new set of rules that make listed companies reflect the true status of the companies and the economy would be much better. #egyptyard
Posted on: Tue, 30 Dec 2014 17:05:52 +0000
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