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.

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.

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.



Please enter your comment!
Please enter your name here

Read More

Dubai: Sheikh Mohammed meets Presidents of Botswana, Zimbabwe and Mauritius

Vice President and Prime Minister of the United Arab Emirates, its Minister of Defence, as well as the Ruler of the Emirate of Dubai - Sheikh Mohammed bin Rashid Al Maktoum, met with the dignitaries of the three African countries during his visit to the DUBAI EXPO 2020 on Monday, March 14, 2022. 

UAE President set to meet President of French Republic during his visit to France

President of the United Arab Emirates, His Highness Sheikh Mohamed bin Zayed Al Nahyan is scheduled to travel to France next week on July 18 for a state visit.

Saint Lucia: Deputy PM Ernest Hilaire attends 81st meeting of Caribbean Tourism Organization

Saint Lucia: The Deputy Prime Minister of Saint Lucia, Ernest Hilaire, has recently participated in the 81st Meeting of the Board of Directors of the Caribbean Tourism Organization (CTO) in Curacao on Thursday, February 09, 2023.


Middle East: Increasing droughts and climate changes leading displacement of millions

Extreme heat waves, poor rains and, droughts, climate change across the Middle East are becoming one of the reasons for the displacement of millions of people living in the countries in the Middle East.

Egypt reports 1,811 new COVID infections with 30 deaths

Egypt recorded a total of 1,811 new cases of the novel coronavirus on Friday, February 25, according to the data shared by the Ministry of Health in its COVID-19 update report.

Know here facts about 17th century’s Magic Studded Dress discovered in Palmwood sank in Dead Sea

Middle East: The Organization of Treasures, burials and antiquities of the Arab world has recently shared an update regarding which the scientists uncovered discovery of a 'magic studded dress'