UAE’s retail investors made 2023 the ‘Year for IPOs’

Dubai: ‘Have you got a NIN yet?’

As subscription opens for the PureHealth IPO – the UAE’s second biggest stock market float of 2023 after ADNOC Gas – retail investors are going to make their presence felt. Again.

This year’s series of IPOs in the UAE – including the recently concluded one from Dubai Taxi Co. – saw an unprecedented number of first-time investors taking a punt in the stock markets. Next year could easily see this repeated all over again, with the supermarket retailers LuLu and Spinneys likely to come up with their own IPOs.

This is where the NIN – or National Investor Number – comes in. Taking out a NIN is mandatory before an investor subscribes to an IPO. And market makers say demand to sign up peaked ahead of the Dubai Taxi float. (It showed up in the final numbers with the company setting a new high on the oversubscription front.)

“DFM is expected to see its second-best year since 2013 with year-to-date returns at around 20 per cent,” said Junaid Ansari, Director of Investment Strategy and Research at Kamco Invest. “On the other hand, ADX is in the red, with a decline of around 4 per cent until December 4.

“Within the GCC, DFM has seen the best performance this year, followed by Saudi Arabia’s Tadawul, which is trading with a year-to-date gain of over 7 per cent.”

The Abu Dhabi headquartered PureHealth had been one of the most anticipated stock floats for over two years now, right from the time the entity – with ADQ as the major shareholder – went through a series of consolidations. The PureHealth network extends well beyond the 20 plus hospitals it owns and operates, and includes medical insurer Daman, state-of-the-art labs, and more.

So, with the subscription opening December 6, “We’re seeing more institutional demand for PureHealth, and this is heavy across the board,” said a banker. “Retail subscriptions are brisk, but institutional demand is off-the-charts.

“Both allotments are expected to be oversubscribed on the first day itself.”

That has been the theme for UAE IPOs right from last year, with DEWA setting the template when it went to market April 2022. A process that’s continued right through to the one from Dubai Taxi. 

Among the ‘star IPO performers in 2023, ADNOC Gas’ stock has lit up with a 35 per cent gain, while Phoenix (the crypto company) opened up with more than 35 percent on its first day (December 5)’, said Sameer Lakhani, Managing Director at Global Capital Partners.

“In Dubai, bellwether stocks like Emaar (up 31 per cent) and Emirates NBD (up more than 35 per cent) have led the way. Salik is running 25 per cent higher and Empower at 20 per cent.

“A turnaround story like Amlak Finance has seen its stock hit 30 per cent – and Gulf Navigation did 300 per cent.

“It has been a clear banner year for the UAE capital market, with record volumes and significant increase in the number of investors.

“This momentum is expected to increase in 2024 with IPOs like Spinneys and LuLu, the proptech company Bayut as well as a healthcare offering from Amanat.”

Investors have already started on the guessing game as to which company will announce the first IPO in the UAE for 2024. Several candidates are the in the fray, the most notable – from a retail investor’s perspective too – being one from LuLu, the hypermarket operator.

But for now, market watchers have enough on their plate with PureHealth. According to Ansari of Kamco Invest, the most remarkable phase for the GCC stock markets has been since October.

“The steep unexpected recovery in GCC seen since the end of October at around 8 per cent – after seeing consistent declines since the end of July,” said Ansari. “This was the exact opposite of what happened in the crude oil market, which traded in almost mirror image pattern since end July 2023.

“The disconnect in the two asset classes is a good thing and shows the declining impact of oil on the markets and the Gulf economy.”