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Overview Focus: Guide on IPO

Published on : July 2018
Author(s):Several

Guide on Initial Public Offerings in the GCC 2018-2019

IPO text besides a manIntroduction

The Initial Public Offering (IPO) is the first occasion on which a company will have shares put up on a stock market. An investment bank will underwrite the IPO and will arrange for the listing of the shares on one or more stock exchanges.

An IPO is often a significant step towards rapid growth for a company, and having shares be available on a stock exchange allows for quick raising of funds

The UAE Securities and Commodities Authority (SCA) governs and produces legislation by which the Dubai Financial Market (DFA) must abide. The DFA reinforces economic growth within the country, and it does so by encouraging IPO’s with attractive benefits such as ongoing access to capital required to further fund growth, succession planning and fair valuation of shares to name a few of the incentives.

Additionally, there are two Financial Free Zones in the country. The Dubai International Financial Centre (DIFC) receives regulations through the Dubai Financial Service Authority (DFSA). The Abu Dhabi Global Market (ADGM) which was established through Federal Law Number 8 of 2004, Federal Decree Number 15 of 2013, Cabinet Decision Number 4 of 2013 and Abu Dhabi Law Number 4 of 2013 is governed by its three authorities which are the Registration Authority, Financial Services Regulatory Authority (FSRA) and the ADGM Courts.

  1. Initial Public Offering in the UAE

  2. Securities and Commodities Authorities 

  3. Dubai Financial Market (DFM)

    • 3.1 Introduction 
    • 3.2 Critical benefits for companies listing on DFM
    • 3.3 Key IPO stages
  4. What is the difference between an NGO and a charity

    • 4.1 Introduction 
    • 4.2 Procedure
    • 4.3 Timeline for admission to trading for debt
    • 4.4 Admission fees
    • 4.5 Flexibility
    • 4.6 Global and regional branding
    • 4.7 Liquidity
    • 4.8 Regulation and law
    • 4.9 Listing criteria on Nasdaq Dubai
    • 4.10 Incorporation
    • 4.11 Financials
    • 4.12 Management
    • 4.13 General suitability
    • 4.14 Working capital
  5. Abu Dhabi Global Market (ADGM)

    • 5.1 Introduction
    • 5.2 Key benefits of the IPO
  6. Initial Public Offering in the Kingdom of Saudi Arabia

    • 6.1 Introduction
  7. Initial Public Offering in the Sultanate of Oman

    • 7.1 Introduction
    • 7.2 IPO process in the Sultanate of Oman
    • 7.3 Disclosures in the prospectus
  8. Initial Public Offering in the state of Kuwait 

    • 8.1 Introduction
    • 8.2 Listing approval
    • 8.2 Additional requirements
  9. Initial Public Offering in the Kingdom of Bahrain 

    • 9.1 Introduction
    • 9.2 Listing requirements and process on Bahrain Bourse
    • 9.3 Public scrutiny post IPO
  10. Conclusion

  11. References

  1. INITIAL PUBLIC OFFERING LISTING IN UAE

The future of IPO looks good both on the global front and also from a national perspective. The outlook for 2018 is very promising, and if IPOs in the country achieve their targets, 2018 could be a substantially successful year. Listed in 2017 were two IPOs, and these were Orient UNB Takaful Insurance raising $16.3 million and Emaar Development listing was for $1.3 billion. On Real Estate Investment Trust (REIT) listing it was Nasdaq Dubai for Emirates NBD Asset Management at $105 million and on Abu Dhabi listing, Adnoc raised $851 million. Q2 of 2017 saw somewhat of a decline as market volatility weighs on investor’s sentiments.  The only IPO which floated a total of 36 million shares by raising proceeds of $96 million was of Jadwa REIT Alharamin Fund. The Reason IPOs are pushed for so strongly and are so successful is often due to the open nature of the business they bring, and also the support they receive. High anticipation of main IPOs is from Abu Dhabi Ports, Sanaat, Gems Education and Emirate Global Aluminium ahead of Aramco sale. The estimation is around 5 IPOs will be able to raise close to $8 billion.

  1. SECURITIES AND COMMODITIES AUTHORITIES (SCA)

In this section, the SCA shall illustrate the function to authorize the companies to commence the IPO. Companies willing to conduct IPOs shall enter into a contract with a Financial Advisor as per Board Resolution Number 11/R.M of 2016 on the regulations of issuing IPOs for public joint stock companies. Said Financial Advisor shall:

  1. Growth Sign on Post-it notesAllow for qualified speculators to gather and present a report of the organization’s business and exercises.
  2. Analyse the conclusion the specialists reach on their underlying impression of the estimation of the offers for membership by the Issuing organization.
  3. Coordinate with the Issuing organization in examining the opinions of the speculators to settle on a choice on the points of interest of the planned offering and the value scope of the offers subject of the advertising.
  4. Work with the issuing organization for setting up the preliminary plan in which the value scope of offers, and this will then be presented to the SCA for endorsement as a preparatory advance toward a declaration of the offering, though not for the declaration time frames indicated in statement (1) of Article (12) in this regard.
  5. Submit offers to financial specialists as for the offers to be provided by the Issuing organization.
  6. Lead informative and instructive workshops for financial specialists to clarify the Book Building procedure to them.

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