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Dubai mall operator Emaar Malls Group (EMG) will start trading on the emirate's main stock exchange on Thursday and looks likely to gain after its initial public offer last month was heavily oversubscribed.
EMG, a subsidiary of Emaar Properties, sold 15.4 per cent of its stock at 2.9 dirhams per share to institutional and retail investors last month. The total amount raised of 5.8 billion dirhams ($1.6 billion) made it the largest share sale in the Gulf region since 2008.
The portion of shares allocated to institutional investors was covered more than 30 times by orders from 470 accounts, while retail investors submitted orders worth over 20 times the amount of shares available to them.
EMG is due to return the extra funds to investors no later than Thursday and some of that money is likely to come back to the market.
"The pre-market indication is that it's going to trade at 3.00 (dirhams) and up," said a UAE-based analyst. "The reason for that is that some of the retail investors bought shares with borrowed money and are factoring in their costs."
It will also be the second stock listing on the Dubai bourse in just over a week, following a five-year hiatus, after Marka debuted on Sept. 25.
That IPO - albeit only worth 275 million dirhams - was hugely oversubscribed by investors as well, and the shares jumped 59 per cent on its first trading day as pent-up demand pushed the price higher.
National Commercial Bank IPO
Elsewhere in the region, investors in Saudi Arabia are likely to continue preparing for an even larger IPO. National Commercial Bank, the kingdom's biggest lender by assets, plans to raise 22.5 billion riyals ($6.0 billion) through a share sale this month.
The bank said in a bourse statement it would sell 300 million shares to Saudi individual investors and 200 million shares to the state-run Public Pension Agency at 45 riyals apiece. Subscription for the IPO will open on Oct. 19 and close on Nov. 2.
Stock exchanges across the Middle East will close for the Muslim holiday of Eid al-Adha next week, although some markets will reopen earlier than others.
Bourses in Saudi Arabia, Qatar, Kuwait and Oman will close for the whole week starting Oct. 5 and trading will resume on Oct. 12. Stock exchanges in Bahrain and Egypt will be closed between Oct. 5 and Oct. 7 inclusive, while markets in the United Arab Emirates will shut down for Oct. 5 and Oct. 6.
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