DUBAI: The Dubai government plans a stock market flotation of utility Dubai Electricity & Water Authority (Dewa), it said on Tuesday, among 10 state-backed companies to be listed as part of plans to boost activity on the local bourse.
The listing plans are aimed at making Dubai a more competitive market against bigger bourses in the region, such those in as Saudi Arabia and neighbouring Abu Dhabi, that are seeing larger listings and strong liquidity.
The Dewa listing plan comes a day after the emirate’s deputy ruler Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum said Dubai is aiming to list 10 state-backed companies, state news agency WAM reported.
“The announcement of Dewa is a very strong signal to the market and investors that what they announced yesterday was not a proposed plan, but a done (deal), and execution has started,” Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital, said. Dubai will also launch a $545 million market-maker fund to boost trading on its stock market.
“I am sure we’re going to be hearing about more listings,” Yasin said, citing Dubai-based energy company ENOC and airport services provider dnata as probable candidates.
Dubai, one of the seven emirates of the United Arab Emirates, had also approved a 1 billion dirham fund to encourage technology companies to list on the local bourse, WAM citing Sheikh Maktoum as saying.
He said a committee overseeing the stock market’s development had approved a goal to double the financial market’s size to 3 trillion dirhams, adding that 10 state and state-related firms would be listed on Dubai Financial Market.
Sheikh Maktoum also announced the formation of a market supervisory committee and specialised courts for capital markets in the emirate, the trade and tourism hub of the Gulf.
A spate of de-listings and an absence of big initial public offerings have put Dubai’s stock market under pressure, raising questions over the future of one of the Gulf’s major exchanges, launched two decades ago.
The latest announcement boosted shares of Dubai Financial Market by more than 14% on Tuesday, its biggest intraday gain in about 18 months.
The benchmark Dubai index ended nearly 4% higher, outperforming other Gulf bourses.
Sheikh Maktoum, who oversees stock markets in the emirate, tweeted on Tuesday that Dewa would be listed on the Dubai bourse in coming months.
Dewa had 884,404 water customers and 990,258 electricity customers as of the end of 2020, according to company data.
Dewa also owns the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, which has a planned production capacity of 5,000 MW by the end of the decade.
Authorities have not disclosed which other companies will be listed.