IPO tests investor confidence; DFM index slides

09.12.2014
Dubai Parks yesterday announced big levels of oversubscription for its offering, with some of the most prestigious investors in the region queuing for shares in the company.
The AED2.5 billion IPO of Dubai Parks and Resorts will test investor confidence as the emirate's benchmark index fell into bear territory for the second time this year, The National reported.
Dubai Parks yesterday announced big levels of oversubscription for its offering, with some of the most prestigious investors in the region queuing for shares in the company.
“We have had a great reaction to our IPO in which we strategically retained a specific tranche for retail investors so that they received a favourable and higher allocation, ensuring that more people could share in the growth of Dubai Parks,” said Raed Al Nuaimi, the chief executive of Dubai Parks.
The offer was 65 times oversubscribed by institutions, including sovereign wealth funds like Kuwait Investment Authority and Qatar Investment Authority, as well as big global investors and regional family offices.
The tranche reserved for UAE investors, some 40% of the IPO, was oversubscribed 10 times, with institutional and high net worth individuals seeking nearly 14 times the number of shares on offer. Individual retail investors oversubscribed by 1.63 times.
“The low participation by retail investors tells me that the flipping opportunity has been reduced and therefore I wouldn’t be surprised if we saw a below-par opening on this stock, considering current market conditions,” said Mohammed Ali Yasin, managing director of the brokerage firm NBAD Securities.

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