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- Dubai 05:22 06:35 12:33 15:53 18:26 19:39
The uncertainty surrounding any revaluation of the dirham against the US dollar is delaying new company flotations on the Dubai International Financial Exchange, sources claim.
Announcements in recent months have linked big names such as Damas jewellery, Damac Properties and Emirates airlines and others with future initial public offerings (IPOs) on the Dubai bourse.
“With DIFX allowing local companies to float IPOs from its exchange through the ‘holding company’ route, more companies were planning to go to DIFX for their initial public offering,” an investment bank at the Dubai International Financial Centre said. “But the uncertainty created by these revaluation stories has put a spoke in the wheel of their IPO plans.”
However, DIFX said, in the long term, the exchange will always be attractive and firms can list in any foreign currency they wish to. “It’s a very attractive platform and it will remain so. We are talking to a significant number of companies that are interested on listing on the DIFX,” a spokesman for the bourse said yesterday.
“We provide a first-class platform for people who want to trade DP World shares or any shares listed on the DIFX,” said Dubai Inter-national Finance Exchange spokesman Mark Fisher.
But the dollar’s slide and the debate over a possible revaluation have hit shares on the DIFX.
Last session, on Thursday, shares of Dubai Ports World – the DIFX’s largest listing – fell more than five per cent to end at their lowest level since they started trading, amid concerns over the dollar’s weakness.
“Hence the issuers are bound to wait to see either a revaluation taking place or the rumours are totally done away with,” said a broker trading on DIFX.
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