UAE’S utility increases after pulling off this year’s second-biggest IPO

Dubai Electricity and Water Authority jumped in its trading debut after collecting $6.1 billion in the world's second-largest initial public offering held this year.

Dubai Electricity and Water Authority jumped in its trading debut after collecting $6.1 billion in the world’s second-largest initial public offering held this year.

Dubai’s leading utility shares rose about 20%, from the offer price of 2.48 dirhams to 2.98% dirhams, which is the top end of the marketed range.

Advertisement

The IPO has valued DEWA at $33.8 billion.

This deal is the most recent sign of a fierce appetite for IPOs from the Arab Gulf. DEWA almost increased the size of this offer by three times, i.e. 18%, in the face of enormous demand, which drew orders worth $86 billion, excluding strategic investors and cornerstone.

Since the Russian invasion of Ukraine, the global IPO markets have shuttered, already buckling beneath the weight of increasing inflation and monetary policy tightening.

The Middle East avoided the worst of the volatility while rocketing energy prices increased cash reserves for local investors, who have been willing to put their money to work.

DEWA priced its IPO for an indicated dividend yield of around 5%, which is a boon as increasing interest rates make companies that provide stable income more attractive.

The utility also has a monopoly in the city and is seen as a path to gain exposure to Dubai’s economic as well as demographic growth possibility.

Advertisement

Last year, Dubai missed out on a burst of share sales in the Middle East, which neighbouring Saudi Arabia and Abu Dhabi led, and DEWA is just the emirate’s second IPO since 2017.

The government plans to list nine more state companies, including Tecom Group, to expand trading activity.

Dubai’s trading activity increased over just the last three months of 2021, hitting a four-year high in November after a string of initiatives to bolster training, but momentum has since faltered. DEWA’s IPO is an essential test of the market’s liquidity.

 

Tariq Saeed

Read More

Dubai Police Apprehend Thieves Behind Al Furjan Villa Burglary

Irene Sutton expressed her relief at the swift action the authorities took to apprehend the perpetrators. She commended the police for preventing any further occurrences by bringing the thieves to justice

India’s billionaire Mukesh Ambani breaks world record, buys most expensive villa in Dubai

The wealthiest Indian, and one of the top most prosperous men in the world, Mukesh Ambani, buys the most expensive villa in Dubai for a record-breaking $163 million.

UAE Athlete Who Once Weighed 100kg Now Aces Marathons Worldwide

Determined to change his life, AlShehhi embarked on a rigorous physical regimen, initially focusing on short-distance runs. His turning point came in 2014 when a billboard advertising a marathon in Ras Al Khaimah caught his eye

Recent

RTA Unveils Key Bridge Linking Jumeirah Street to Infinity Bridge to Ease Traffic Congestion

The 985-metre bridge, featuring two lanes, has been designed to accommodate up to 3,200 vehicles per hour, and is expected to drastically ease congestion in the area

UAE announces 21 days quarantine for people came in contact with monkeypox patients

The United Arab Emirates has reported three new cases of monkeypox virus, stated the country's health ministry.

Dubai to Launch Three New Bus Routes and Modify Existing Services Starting November 29

One of the most anticipated additions is Route 108, which will directly link Satwa Bus Station to the popular Global Village. This route is expected to cater to visitors and residents heading to the world-renowned cultural and entertainment destination
admin