x Abu Dhabi, UAEWednesday 17 January 2018

Daman sells Dh99.9m in shares as it weighs IPO

Daman Investments has sold close to Dh100 million of shares in a private deal. The news comes as the Dubai investment manager prepares for an initial public offering.

Daman Investments has sold close to Dh100 million (US$27.2m) of shares in a private deal.

The news comes as the Dubai investment manager prepares for an initial public offering that has been on hold since the onset of the financial crisis.

The private placement of Dh99.9m worth of shares valued the firm at Dh440m, Daman said. There were no details on who the new shareholder or shareholders may be, however.

The shares were sold at Dh170 each, said Shehab Gargash, the chief executive of Daman Investments, which manages equity, property and art-focused funds.

"The success of the capital raise at a premium is a very clear indicator of the value of Daman, and the robust nature of the UAE market, in the midst of one of the most severe crises the world has ever seen," he said.

"Daman Investments continues to eye launching a future initial public offering based on improved market conditions."

The company's combined capital base increased by 22.7 per cent as part of the private placement.

Daman hoped to be listed "on one of the markets in the UAE" in the medium-term, he added, declining to specify which of the country's three exchanges the company would prefer.

The company originally planned for an IPO this year but a spokesman said it was unlikely to take place before next year.

Daman Investments is fully owned by Mr Gargash, according to Zawya. He is the brother of Dr Anwar Gargash, the Minister of State for Foreign Affairs.

Daman Investments is distinct from National Health Insurance Company, known as Daman Health, a government-owned health insurer.

The number of companies seeking to list has increased this year following a swell in market values on local exchanges, which resulted in the Dubai Financial Market General Index rising as much as 30.7 per cent between the start of the year and early March. The index has since fallen by almost 20 per cent.

About half of the index's gains so far this year have been accounted for by a rise in shares of Arabtec, which were throughout the year being quietly accumulated by Abu Dhabi's Aabar Investments.

Eight companies have completed public share sales in the Middle East so far this year, raising a total of $1.1 billion, according to data from Reuters.

NMC Health, the UAE's last company to complete an IPO, raised £117m (Dh669.8m) from investors in April.

However, its decision to list on the London Stock Exchange drew criticism from Jeff Singer, Nasdaq Dubai's chief executive, who said companies should be encouraged to list locally rather than overseas.

The Nasdaq Dubai lowered its minimum market capitalisation requirements this month in an effort to attract more small-and-medium enterprises to list.

Currently, there are only two stocks trading on the index after the delisting of Damas International this month.

Last week, Just Falafel said it was planning a listing on the Nasdaq Dubai with the aim of raising the profile of its brand.