x Abu Dhabi, UAETuesday 25 July 2017

DP World's London listing expected to boost profile

The widely-anticipated listing of DP World on the London Stock Exchange is likely to boost liquidity in the port operator in the long-term.

Probable move likely to attract investment from foreign entities

Farah Halime

DP World's likely imminent London listing is expected to energise trading in the port operator's shares and expose the company to a new type of investor.

The company said this week that it was on track to list on the London Stock Exchange (LSE) as early as the end of this month.

Analysts say the move that will expose the company to billions of dollars directed into developed markets. DP World's shares are currently traded on Nasdaq Dubai, one of the UAE's three stock exchanges, but many investors have avoided the stock because of the country's classification as a "frontier" market by MSCI stock market index.

"There are a lot of funds who like the [DP World] story," said Redwan Ahmed, an analyst at EFG-Hermes in Dubai. "This will attract a wider investment community and improve liquidity and, in theory, [the share price] should go up."

He has a "buy" rating on the stock and a price target of 75 US cents.

JPMorgan also views the London listing positively.

"We continue to anticipate share price progression … along with a likely catalyst in the near-term listing of shares in London," the bank's analysts wrote in a note yesterday.

Analysts have also cited the listing as a step towards an additional sale of assets by majority shareholder Dubai World.

Just 20 per cent of DP World's shares are available to the public at present. Dubai World owns the rest. Clarity over Dubai World's debt restructuring has also reassured investors.

"There was concern that there might be a fire-sale on DP World, but that issue is no longer there," Mr Ahmed said.

DP World closed flat at 69 cents yesterday on Nasdaq Dubai, after rising 6 per cent over the week.

The company reported a better-than-expected 13 per cent increase in full-year profit to US$374.8 million, helped by a rebound in global trade and improved profit margins.