By: Amr Fouad
Dubai – Mubasher: Affected by the Dubai Financial Market’s (DFM) declines, all newly-listed companies on the market have incurred varying large losses due to plunging oil prices added to an absence of market incentives. Investor fears and worries are also controlling the markets, prompting their decline, analysts have said.

Recently-listed stocks on the DFM have incurred a total of AED 8.6 billion in losses, with Emaar Malls making up 81% of such losses.

The DFM saw four listings in 2014, starting with Marka, Emaar Malls, Amanat Holdings and Dubai Parks & Resorts. The latter, a subsidiary of Meraas Holding, commenced trading on Wednesday, November 10, 2014.

Commenting on the DFM’s performance, Nabil Farahat, Partner at Al Fajr Securities, said that UAE markets are suffering continuous declines owing to a state of ‘panic and irrationality’ that is controlling traders and investors.

Margin call transactions have pressured the local markets, added to the lack of clarity and continued drop in oil prices, Farahat told Mubasher.

Meanwhile, UAE market analyst Wadah Taha told Mubasher told Mubasher that the growing pessimism that has controlled UAE market performance of late is due to a generally negative atmosphere. Moreover, indicators remain negative, he said.

Taha attributed this negative atmosphere to the continued oil price decline, added to markets shedding support levels that they were supposed to rebound at. These factors are also accompanied by retreating liquidity levels, which have not prompted any market rebounds.

Asset Manager at Al Mal Capital Tarek Qaqish had previously told Mubasher that the successive launching of such IPOs and in this manner is considered ‘unhealthy’ for the markets.

Marka marked the first initial public offering (IPO) on the DFM this year, and the first in the retail sector to offer its stocks for public subscription in the UAE. Marka offered 55% of its shares amounting to AED 275 million. The IPO was oversubscribed 36 times and the Company commenced listing on the DFM on September 25, 2014.

Since its listing, Marka’s share lost AED 395 million falling from AED 2 per share to AED 1.21 per share.

Emaar Malls Group, a subsidiary of Emaar Properties, was the DFM’s second IPO. The Company launched 15.4% or AED two billion of its capital. The IPO was 30 times oversubscribed by institutions and 20 times by individual investors. The Company commenced trading on the DFM on October 2, 2014.

Emaar Malls suffered the highest market losses, amounting to AED seven billion, plunging from AED 3.5 to AED 2.96.

Amanat Holdings, a company under incorporation, marked the third IPO on the market. The firm launched 55% or AED 1.375 billion of its AED 2.5 billion capital. The IPO was 10 times oversubscribed.

Amanat’s stock, which was listed on the DFM on November 30, lost AED 300 million to AED 0.88.

Finally, Dubai Parks & Resorts, a company under incorporation and a subsidiary of Meraas Holding, launched an AED 2.53 billion IPO, representing 40% of its capital. Subscription began on Monday, November 17 and ended on November 30.

The theme-parks firm lost nearly AED one billion in its first trading session, with the stock plunging by 14% to AED 0.85.


Translated by: Nada Adel Sobhi


Photo Credit: Arabianeye-Reuters