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Abu Dhabi Ports surges 15% after raising $1.1bn in latest UAE IPO

An Emirati woman paddles a canoe past skyscrapers in Abu Dhabi, United Arab Emirates, on Wednesday, Oct. 2, 2019.

Christopher Pike | Bloomberg | Getty Images

Shares in Abu Dhabi Ports Group surged 15% on its debut on Tuesday, after raising 4 billion dirhams ($ 1.1 billion) in a share sale, marking the first in a series of highly anticipated listings for the United Arab Emirates this year.

Abu Dhabi Ports, now trading on the Abu Dhabi Securities Exchange (ADX) as ADPORTS, operates 10 ports in the UAE, a terminal in Guinea and several logistics and industrial zones. Its flagship Khalifa Port in Abu Dhabi was the first deep-water and semi-automated container port in the GCC region.

“The cash proceeds from this primary issuance will be used to fund the company’s organic and inorganic growth plans, allowing the company to accelerate its local and international expansion plans,” the company said in its investor filing.

Abu Dhabi Ports is owned by ADQ, the UAE’s third largest sovereign wealth fund. ADQ will remain the majority shareholder with a 75.44% stake in the company. ADQ also transferred 22.32% stake in Aramex and a 10% stake in the National Marine Dredging Company to Abu Dhabi Ports prior to the sale, according to filings.

Reuters also reported that Abu Dhabi conglomerate IHC took a 7.4 percent stake in Abu Dhabi Ports ahead of the listing through its subsidiary company Al Seer Marine, which bought 375 million shares worth 1.2 billion dirhams ($ 326.74 million) in total.

Listing spree

The latest listing comes amid a privatization push now underway in the United Arab Emirates.

ADX has seen a surge of new listings in the past year, with the Abu Dhabi National Oil Company (ADNOC), state investor Mubadala and IHC undertaking a number of public offerings, helping to make the ADX among the best performing regional markets last year.

ADNOC Drilling raised $ 1.1 billion for its IPO in October last year, the emirate’s biggest ever listing. Rival Saudi Arabia has also seen record interest, with the IPO of stock exchange operator Tadawul Group raising more than $ 1 billion dollars. It follows the $ 1.2 billion dollar float of renewable energy utility ACWA Power International, which was the Kingdom’s biggest since the IPO of Aramco in 2019.

The performance is in contrast to Dubai, where capital markets have trailed peers in both Abu Dhabi and Riyadh, despite renewed investor appetite across the Gulf region. Poor liquidity and a number of high profile de-listings – such as port operator DP World, Emaar Malls and Damac Properties – have dented investor sentiment in recent years.

In November, Dubai announced plans to reverse the trend, seeking to “increase the total volume of its stock markets” to AED 3 trillion ($ 817 billion). The government said it plans to privatize 10 state-owned companies, without naming specific businesses or setting a date for the listings.

Business park operator TECOM, utility Dubai Electricity and Water Authority (DEWA), road toll system Salik, and businesses within Emirates Group, including dnata and loyalty program Skywards, as well as Dubai airport’s Duty Free have been rumored among those being considered for public offer .

News of the potential new listings has sent Dubai’s benchmark DFM Index up more than 11% since the announcement.

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