Dubai firms urged to list locally to compete globally

A senior official of the Dubai government’s advisory council has urged local companies to list on the local markets and also enhance mergers and acquisitions in order to face the global challenges more effectively amidst changing business culture environment.

Hani Al Hamli, Secretary-General of the Dubai Economic Council (DEC), said M&As represent one of the most important elements of corporate strategy as companies seek to grow, expand and diversify their portfolios.

He was speaking at the ‘Megatrends in Mergers & Acquisitions’ seminar held at the Dubai International Financial Centre (DIFC).

Al Hamli noted that one of the most important driving factors behind the growth in M&A is the accelerating pace of globalisation and trade, along with the decline in the cost of financing which is driven by intense competition among financial institutions.

Citing global financial crisis as the turning point in the movement of global M&As, Al Hamli said the crisis ruptured the investment environment and created uncertainty in all markets and sectors, particularly in light of the decrease in asset prices and stocks due to lower demand and scarcity of liquidity.

The seminar demonstrated global M&A trends shifting towards North America, Europe and Asia, while emerging markets such as China and India still maintain a significant share of activity.  At the industry level, banks and financial institutions are at the forefront of sector M&A, followed by healthcare, telecommunications, high technology, energy and industrials.

Al Hamli said GCC states will become increasingly attractive for FDI due to their wide range of activities.

“Perhaps the most important factors that contributed to this trend is the economic reforms undertaken by countries in the region, particularly in terms of liberalization of foreign investment, the presence of investment arms of governments, the abundance of liquidity, particularly in periods of high oil prices” Al Hamli added.

Al Hamli stressed that UAE is at the forefront of the GCC M&A market. “The UAE has been ranked the 19th most attractive country for M&A activity globally, gaining eight places over the last five years, according to the M&A Attractiveness Index published by “Cass Business School”, which ranks 131 countries on their ability to attract and sustain domestic and inward M&A deals,” Al Hamli added.

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