A rush by Dubai’s retail investors to take part in the initial public offer of Emaar Properties’ malls unit put pressure on the emirate’s stock market on Tuesday, while successful fund-raising for the Suez Canal expansion lifted stocks in Egypt.
Emaar said late on Monday that institutional investors had committed to buying all the shares offered to them in the flotation of its shopping malls business, only a day after the IPO was launched.
Dubai’s largest property developer plans to raise as much as 5.8 billion dirhams ($1.58 billion) from the offer of a 15 percent stake in Emaar Malls Group (EMG), which is expected to be the Gulf’s biggest stock sale since 2008.
Emaar aims to sell about 30 percent of the offered shares to retail investors in a separate tranche, and Monday’s announcement appeared to have prompted them to submit more purchase applications, leading them to cash out of other stocks to raise money. Emaar has said it will allocate shares on a pro rata basis in case of oversubscription.
Dubai’s index fell 0.7 percent while shares in Emaar itself slid 1.8 percent. Retail investors were net sellers of stocks, according to bourse data.
“It’s a big IPO so some investors have to manage their allocations and may have to offload some parent company shares,” said Harshjit Oza, property and banking analyst at Naeem brokerage in Cairo.
“The stock has been very volatile and I think you’re going to see this volatility until EMG gets listed.”
The offer closes on Sept. 24 for retail investors and on Sept. 26 for institutional investors, with EMG shares then listing on the Dubai Financial Market on Oct. 2.
Abu Dhabi’s bourse slipped 0.1 percent because of banks. Union National Bank fell 2.6 percent, Abu Dhabi Commercial Bank edged down 0.9 percent and National Bank of Umm Al Qaiwain tumbled 7.4 percent.-Reuters
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