Analysts believe that the initial public offering (IPO) market of the UAE is expected to grow this year with at least five new offerings to be launched in the near future. They expect each to range from $200 to $500 million.
Lama Abou Ghali, Senior Capital Markets Analyst, Zawya.com, told reporters at <i>Gulf News</i>, "We expect the IPO market in the UAE to be the same size as 2005 although a lot more IPOs are likely to happen in Saudi Arabia this year. In the UAE there are at least five new IPOs in the pipeline, in sizes from $200 to $500 million."
"We will see the same pace of growth in IPOs this year despite tighter regulations for new companies. However, the subscription would depend on certain factors like pricing," he added.
Money raised last year in the UAE through IPOs stood at some Dh7 billion, significantly higher that the previous year, when IPO raised only Dh2.5 billion.
In 2006, IPO's are likely to grow through private placement channels as well as public subscriptions.
"If the promoters and business model is good, private placements have great potential to be successful and gain high subscription. Investors also trust such placements," said P. Krishnamurthy of the National Bank of Furjairah.
He added that the days of "huge over-subscriptions are mostly over."
Another banker revealed that, "We expect at least two subsidiaries of the Abu Dhabi Water and Electricity Authority to go public this year. There is also Bena, owned by the General Holdings Company in Abu Dhabi as well as the Abu Dhabi Islamic Finance House".
