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MENAFN - Khaleej Times - 06/09/2012

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(MENAFN - Khaleej Times) Al Habtoor Group, one of the leading family businesses in the UAE, confirmed on Wednesday that it is pondering an initial public offering (IPO).

The chairman of Al Habtoor Group Khalaf Al Habtoor after his meeting with senior officials from the Dubai financial sector stressed the importance of the family businesses in the UAE, and said his group wanted to be "a market leader for well-known family businesses going public."

Al Habtoor met Jeffrey Singer, the new chief executive officer of the Dubai International Financial Centre Authority, or DIFCA, and Hamed Ali, acting chief executive of Nasdaq Dubai.

"The meeting is an encouraging sign that Nasdaq Dubai and the DIFC acknowledge the importance of family businesses in the UAE. We are the foundation for the future," Al Habtoor said.

Following the meeting, in a statement the group, with interests spanning businesses ranging from construction, hospitality, automotive and real estate sector, said it is considering an initial public offering "amid further strengthening the UAE's prominent position in the capital markets and increased inflows from the eurozone."

The group said it already has a high level of corporate governance and its financial statements are prepared under IFRS and audited by an independent firm.

In September 2007, Al Habtoor sold a 45 per cent stake in Al Habtoor Engineering to the Australian construction giant Leighton for 860 million.

Recently, the group launched a 1.3 billion mega project involving a new hotel complex along Shaikh Zayed Road. The project includes three five-star hotels with more than 1,600 rooms, tennis courts, a garden, shops, restaurants and a theatre, is one of several hospitality projects.

Al Habtoor's planned foray into IPO market comes amid lacklustre market activity in the region in the backdrop of eurozone crisis and lingering negative impact of the financial crisis.

Analysts at Kuwait Financial Centre pointed out that trade volumes in the GCC decreased by 25 per cent while value traded decreased 38 per cent in May to 49 billion. This was on the back of 22 per cent month on month drop in volumes and 16 per cent decrease in value traded in April. Saudi Arabia, which accounted for 88 per cent of GCC's total value traded, witnessed a 40 per cent drop in value traded, Markaz said.

In 2011, the GCC witnessed only eight initial public offerings compared to 14 in 2010 as capital markets in the Middle East and North Africa, or Mena, raised 893.9 million in initial public offerings, posting a decline of nearly 70 per cent on the previous year as global IPO fundraising went down 45 per cent.

According to Global Investment House, during 2011, only nine GCC companies offered their shares to the public, with an aggregate value of 795.6 million, down by 54.9 per cent compared to 2010.

These IPOs were mainly concentrated in Saudi Arabia, with five Saudi companies floating their shares. The remaining offerings were one in Oman, and three in the UAE.

During 2011, market capitalisation for the GCC markets dropped 7.1 per cent to 697.4 billion by the end of December compared to end of year 2010. The Saudi market constituted 48.6 per cent of the aggregate market capitalisation of the GCC stock markets.

Total volume of shares traded during 2011 stood at 133.8 billion shares, which was 21 per cent lower than aggregate traded volume in 2010. In the meantime, value of shares traded increased from 296.7 billion in 2010 to 356.1 billion in 2011, up by 20 per cent, Global said.

The largest IPO of 2011 in Mena was the UAE's Eshraq Properties (229.1 million), followed by Saudi Arabia's Hail Cement (130.5 million) and United Electronic (105.6 million).

Last year, Saudi Arabia led the country standings, raising 460.5 million through IPOs, followed by the UAE with 271.3 million and Oman with 63.9 million.


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