MENA IPOs lead their way to capital markets at the London Stock Exchange- Al Masah Capital

UAE- 26^th November: Taking cues from the panel discussions held at the 5^thAnnualInvestor Forum that took place in Dubai recently, it was observed that following the success of regional brands like Noor, IDH and NMC’s listing at the London Stock Exchange, local conglomerates will soon be making it a trend to attract trade practices at international exchanges.

A part of Al Masah’s yearly investor forum, the panel discussion was led by industry experts such as Dr. Christopher Laing, Managing Director- Emerging Market ECM Deutsche Bank, Joseph Najjar- Director MENA ECM, Credit Suisse, ArshadGhafur, President- MENA at Bank of America Merrill Lynch. Pointing out nuances of trade at international exchanges and the benefits of issuing IPOs on a global platform as compared to nation-owned exchanges, the panel cited that following fewer restrictions and reporting requirements; the London Stock Exchange seems to be gaining popularity as the new welcoming platform for local companies to attract international investment.

They agreed that with good liquidity and secure prices, the LSE reflects intrinsic values towards fair and competitive capital markets. Any company with an IPO in the pipeline will want to assure themselves gainfuland easy access to capital markets with follow on offerings and other corporate actions.Companies listing on exchangeslook out for favorable conditions that facilitate corporate financing needs while at the same time not over burden them with too much administrative red-tape.

By virtue of its international platform, the London Stock Exchange opens and introduces IPOs to more global investors than would a listing on a MENA exchange. Also, many a factors like listing in the form of capital increase as opposed to sell down, no book building pricing procedure and a minimum of 55% sell-out to public; seem to discourage companies from issuing at the DFM or ADX.However with recent recordings it was noticed that the Middle East exchanges have begun to change these norms and give exceptions. A fair example being the issue of Emaar Malls which sold less than 55% which also was a book building issue; cleared the expert panelists

Continuing their observation further the panel mentioned that the Emaar Malls listing has shown and is testimony enough that the government is aware that it will need to be more competitive on an international front when it comes to market listing rules. It won’t want to lose business from giant brands here in the region to international exchanges that have more favorable listing requirements. The trend is showing that thenation’s robust economy isnow moving in a trade-favorable direction.

The panel culminated that the LSE trend is largely to be seen strengthening economic relationships between the UK and Middle East’s sound economies.