Some of Dubai's biggest listed companies will make presentations next week in New York to stoke investor interest as firms in the GCC mount a recovery from the financial crisis. The road show, scheduled for next Monday and Tuesday, aims to bring together the management of firms listed on the Dubai Financial Market and NASDAQ Dubai with large US investors deploying capital overseas.
"These conferences allow direct contact between senior management and the professional investment community," said Oliver Schutzmann, the head of investor relations at Shuaa Capital, one of the firms listed in Dubai that will take part in the presentations. "This is an excellent opportunity for institutional investors to get introduced to companies they perhaps haven't met yet." The 15 firms taking part in the presentations include Emaar Properties, the construction firm Arabtec Holding, Air Arabia, DP World, Dubai Islamic Bank and Emirates NBD, the lender that on Monday reported a better-than-expected 3 per cent rise in third-quarter profits.
The meetings come as foreigners grow increasingly comfortable investing in companies and governments in the GCC. While Dubai's stock market endured one of the world's deepest slumps during the financial crisis, prices have recovered strongly. The Dubai Financial Market index has risen by more than 60 per cent since reaching a low of 1,433 points in February. Markets have a long way to go before they reach pre-financial-crisis highs, but investor sentiment in the Gulf also appears to be strengthening. A survey published on Monday by Shuaa registered a 9.2 per cent jump in sentiment for the UAE's markets last month and a 3.8 per cent rise for GCC markets overall.
Meanwhile, the Dubai government is in the middle of a promotions of its own in Asia, Europe and Dubai to tap thawing global capital markets and borrow as much as $6.5 billion (Dh23.86bn) to help cope with an estimated $85bn debt. Ali Khan, a director at Arqaam Capital in Dubai, said this was an opportune time for companies based in Dubai to sell themselves to international investors, given the market dynamics.
"I think it is definitely a good time precisely because of the large moves we've seen" in stock prices, he said. "We've gone from a process of fire-sale valuations to more stability and normalisation." These days, foreign investors are likely to be paying more attention to companies' plans to enlarge their profits, Mr Khan said. And companies would have to sell themselves on the expectation of solid earnings instead of pointing to hefty discounts on their shares, a strategy that worked only when markets were hitting lows and investor confidence was flagging.
"This year, it has been more of a case where the message has been we're strong enough to survive and don't deserve a 50 to 60 per cent discount to book [value]," Mr Khan said. "We've gone through that." The Dubai Financial Market and NASDAQ Dubai have made presentations to foreign investors periodically since 2007. The Abu Dhabi Securities Exchange has since joined the bandwagon; its latest road show took place in London this month.
The presentations have had a measurably positive effect on local markets, with marked increases in trading volumes and share prices as foreign investors piled in, Mr Schutzmann said. @Email:firstname.lastname@example.org