Investment experts do not believe there will be a "pop" effect when shares in DP World, Dubai's global ports operator, begin trading on the London Stock Exchange tomorrow.
"Popping" is when a share soars to a big premium on its opening day of trading, and has been a feature of several global flotations recently. But analysts said it was unlikely DP World shares would rise significantly when trading begins.
"There may be some small upside on day one and some 'feel-good' factor, but I don't think anybody expects a 'big bang' for DP World," said Redwan Ahmed of EFG-Hermes.
Another Dubai analyst, who asked to remain anonymous, said the shares had already risen this year.
"This has been a well-telegraphed move for DP World, so much of the benefit of the London listing is already in the share price. They've moved up quite a bit since firm plans were announced earlier this year."
DP World shares closed yesterday at US$13.40, up 0.75 per cent - a little off recent highs but maintaining the momentum since strong trading results in March, when definitive plans for the London move were also announced. They were floated at the equivalent of $26 in 2007.
No new money is being raised in the listing, which will be in the form of "depository interests", or quasi-equity.
"I don't see them soaring 10 per cent on day one, but we have a target price of $15 over the next 12 months, which is a respectable level of increase if they achieve it," said Mr Ahmed.
Other analysts' target prices fall in a range of $13.40 to $16.38.
If they do reach the upper end of that range, DP World's 80 per cent shareholder, the indebted government conglomerate Dubai World, might consider selling some of its stake, the Dubai analyst said. "We see any increase in the amount of free-float on the market as a good thing, which can only increase liquidity," he added.
DP World's prospectus revealed Dubai World was considering selling some shares in the port operator to repay debts due by the end of this year.
The first day's trading will be closely watched by Nasdaq Dubai executives. DP World shares are by far the most actively traded on that market, yesterday accounting for $1.79 million (Dh6.5m) of the total $1.81m traded by value.
Some fear the London debut will rob Nasdaq Dubai of crucial volume. "I think there will be a significant shift of stock from Dubai to London. There are longer trading hours there, commission costs are lower and there are no restrictions on foreign ownership levels," the Dubai analyst said.
The process of converting ordinary shares to depository interests could take a few days to implement, he said.
DP World will not be eligible for the FTSE 100 Index, despite qualifying with its market capitalisation of about $11 billion. It is ruled out on grounds of non-UK incorporation and the small size of the free float.
"What might be more significant for DP World will be whether the UAE is upgraded to emerging market status when Morgan Stanley Capital International [MSCI] comes out with the new ratings next month. That could be the occasion for the big bang," said Mr Ahmed.
Senior DP World executives and advisers are in London preparing for the first day's trading, after a series of presentations to potential investors in the UK and continental Europe over recent days.