Dubai plans to offer shares in its main utility as part of a plan to boost the emirate’s flagging stock market.
The emirate will sell a stake in Dubai Electricity and Water Authority “in coming months,” deputy ruler Maktoum bin Mohammed bin Rashid said in a tweet on Tuesday.
Shares will be listed “in stages” due to the size of the utility’s assets and profile in the economy.
Dubai said on Monday it plans to sell stakes in 10 state-owned companies in what may prove to be a test of confidence in a stock market dogged by falling volumes at a time when regional rivals are stepping up sales.
The sale is part of plans to boost the size of its financial market to AED3 trillion ($817 billion) as the Middle East’s business hub seeks to catch up with Abu Dhabi and Riyadh.
.@MaktoumMohammed: #Dubai intends to list @DEWAOfficial on Dubai Financial Market; the listing will be carried out in phases, taking into account the size of the assets.
— Dubai Media Office (@DXBMediaOffice) November 2, 2021
The emirate’s deputy ruler announced the plan at his first meeting as the head of the securities and exchange higher committee, without providing a timeline for the listings.
He also approved a AED2bn market-making fund to increase liquidity and a AED1bn fund to support tech IPOs.
Trading on the main bourse has fallen in three of the past four years as a string of companies delisted at a time of declining liquidity and stock prices.
DEWA has more than a million customers in Dubai, according to its website. Along with its subsidiaries, it has assets worth up to AED190 billion ($52 billion). It reported net income of AED4.9 billion in 2019, the latest data available to Bloomberg.
Dubai has staged just one IPO since 2017, and its only prospect of a listing this year fell through when logistics firm Tristar Transport pulled its offering in April.
At the same time, flagship names such as port operator DP World have delisted. Others like Emaar Malls and Damac Properties are in the process of doing so.
At the same time, the Covid-19 pandemic has hurt the city’s lifeblood tourism and real estate industries.
Meantime, new listings in other Middle East financial hubs such as Abu Dhabi and Riyadh are attracting a flood of cash.
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