DUBAI, July 19, (RTRS): The UAE’s first IPO of 2010, scheduled for June by lead manager Shuaa Capital, will not take place before the fourth quarter due to the weak market, a banking executive familiar with the matter said.
Shuaa said in May it was lead manager for a 1 billion UAE dirhams ($272 million) IPO for an unnamed Abu Dhabi company.
A Shuaa spokeswoman declined to comment.
“It’s not happening until after Ramadan, we’re talking early fourth quarter now,” the executive said on Monday. “They’ve decided not to do it now because the market is not doing well and the European crisis didn’t help either.”
The news signals that the country’s market for IPOs, damaged by the financial crisis of 2008, remains a long way from recovery. Ramadan lasts for a month and is due to begin in early August.
Shuaa’s chief executive Sameer al Ansari said in May that the IPO would encourage hundreds of other companies to follow suit and seek a listing by the end of the year.
Shuaa has not identified the company involved, but the banking source said it was an infrastructure company.
The Middle Eastern IPO market has shown few signs of recovery. Experts have said family businesses across the region are hoping to turn to the equity markets to raise cash , but the current lack of investor interest coupled with the debt trouble some of these companies carry hamper the sector’s revival. In the Gulf region, the only IPOs that of 2010 have been in Saudi Arabia and Qatar, a study from Pricewaterhouse-Coopers (PwC) showed.
Still, IPO activity is expected to rebound soon, PwC said.
“We are seeing a significant increase in activity behind the scenes and a number of companies are gearing up for IPO this year,” said Steve Drake, head of Middle East Capital Markets Group at Pricewaterhouse-Coopers.
“There has been a step change in sentiment and with a pent up demand for capital, companies are preparing to come to the market. As it takes between six and nine months to prepare for IPO, we’re likely to see more companies list by the end of the year or early 2011,” he added.
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DUBAI: Dubai consumer prices edged higher in June, rising 0.15 percent from the previous month, boosted mainly by increasing food prices, data showed on Monday.
This compared to a 0.78 percent rise in May that reversed a six-month run of declines.
The global downturn slashed consumer price growth across the Gulf oil producing region from record peaks in 2008, with some countries such as the United Arab Emirates and Qatar seeing months of deflation last year.
Dubai is a member of the UAE but also publishes separate inflation data.
In the first half of 2010, prices were up 0.64 percent compared to the same period a year earlier, also led by rising costs of food, which edged up 0.45 percent.
Historical data beyond 2008, when annual inflation reached a peak of 10.8 percent, is not available.
The UAE has yet to release federal inflation data for June.
Consumer prices in the UAE, the world’s third-largest oil exporter, rose by 0.88 percent year-on-year in May and fell 0.07 percent on the month.
The data for the UAE and the individual emirates are not directly comparable as basket weights differ.
Dubai, which lacks the oil wealth of its neighbour Abu Dhabi, took a big hit from the 2008 global crisis and recent debt restructuring problems, dragging down the UAE economy.
Prices in the key housing and energy component, which has a 44 percent weight in the Dubai basket, rose by 0.01 percent month-on-month in June, after a 0.59 percent increase in May.
Food prices, which account for 11 percent of the overall index, rose 1.08 percent in June, after increasing by 1.37 percent in the previous month.