Market Wrap: Abu Dhabi developer Eshraq was oversubscribed as its initial public offering garnered more interest than expected
IPO of Abu Dhabi developer Eshraq oversubscribed
An initial public offering by Eshraq, the Abu Dhabi property developer, received more interest than it required to sell 55 per cent of the shares it was putting up for offer, on the last day of the subscription period yesterday.
"Despite launching a real estate offering at a difficult time for the market, we managed to oversubscribe the IPO," said Majd Maaitah, the director of securities services at the National Bank of Abu Dhabi.
Eshraq wanted to raise Dh825 million (US$224.6m) in the country's first IPO outside the insurance sector to test the public market in two years.
Final details, including when the company will list on the Abu Dhabi stock market, will be released at a later date, Mr Maaitah said.
On UAE bourses, first quarter results dictated the movement of the market.
Energy giant Taqa fell to its lowest point in almost two months foreign exchange losses and a tax hike dragged on first quarter earnings.
Its shares have shed more than 15 per cent in value in just more than 10 days. Yesterday it closed 1.4 per cent to Dh1.38.
Volumes on UAE bourses have been light as long-term investors take a step back while speculators dominate the market.
"When we see low volumes of around 200 million on [UAE] markets, it's the speculators that are the ones dictating the movement of market in absence of long term investor," said Mohammed Ali Yasin, chief investment officer at CAPM Investment.
He added that with first quarter results now largely behind most traders, speculation on second quarter results had begun.
"It's not going to be worse than the first quarter for most companies, but you have to pick and choose," he said.
Dubai's market ended flat at 1,608.49 points and the Abu Dhabi market edged 0.2 per cent higher to 2,675.79 points,