DEWA Listing to Breathe New Life into Financial Markets of Dubai

The listing of Dubai Electricity and Water Authority PJSC (DEWA) on DFM (Dubai Financial Market) will rejuvenate the city's scenario on the stock exchange. As per senior economists ' statement in Arabian Business, the optimistic post-IPO performance has prospects of creating a model for auxiliary efforts for investments and privatization.

How much share capital will DEWA float?

Being a USE government-owned enterprise, DEWA plans to float 6.5% of its issued share capital, which accounts for 3.25 billion shares in the IPO issuance.

A Quick Overview of UAE’s Stock Market Prospects

? During 2014, Marka’s Greenfield IPO delivered a disappointing performance

? DEWA is planning an attempt to invigorate the otherwise dry stock market

? KSA and ADX (Abu Dhabi Stock Exchange) have IPO opportunities in?abundance

What Majd Dola says about DEWA listing?

Thus DEWA will have to propose a striking yield to offer attractive returns to investors, stated Majd Dola (CFA), First Abu Dhabi Bank's equity portfolio manager. Besides, the following are critical takeaways as per Majd Dola:

? Post-IPO performance is crucial for DEWA and its future IPOs on the index for setting the standard

? Considerable stock performance post IPO will draw more investors alongside regional and international interests

? DEWA’s listing will enable DFM to join the regional markets’ emergent body consisting of KSA and ADX

? Conversely, if the DEWA's IPO fails to perform well, it can backfire on the stock index

Why DEWA's listing is significant for Dubai Financial Market?

Dubai announced the listing of ten state-owned entities on DFM for boosting the financial market's size to AED3 trillion or $817 billion in November last year. Eventually, it would enable the business hub of the Middle East to catch up with Riyadh and Abu Dhabi.

DEWA’s listing is crucial for the DFM in the following ways:

? Privatize a portion of Dubai Government Jewels by listing fragments of them on the stock market to fulfill the promise made in last year November, as per Mohammed Ali Yasin, Al Dhabi Capital Ltd.’s chief strategy officer.

? DEWA's listing will boost the depth, thus diversifying the DFM's listed companies after sluggish hits in the last seven years.

? It will revivify the DFM to regain its former position as the choice for the public market to draw FDI in the region.

Step Taken to Boost the Bourse of Emirate

Dubai swapped five out of seven board members of its stock exchange. It was done under the Middle East business hub's strategy to enrich the bourse of the Emirate.

An Overview of DEWA’s Partial Privatization

The proposed privatization of DEWA is partial and comprises a small portion of its shares due to the following factors stated by Omar Al Ubaydli, Derasat's director of research.

? Asset’s strategic nature

? Government's willingness to preserve operational control, especially in the present uncertain scenario

? DEWA's plan to experiment steadily as the water and electricity privatization is challenging to execute throughout the world successfully, unlike telecommunications and other utilities

Final Take on DEWA’s listing

Omar Al Ubaydli further said that the initiative of DEWA's listing is essentially progressive as it will enhance performance, customer experience, and innovation. These can be tracked using the customized KPIs efficiently over the coming decade. It will be a helpful input while implementing decisions concerning further privatizations, including DEWA and other portions of the public sector.?