Al Tamimi's Husam Hourani lets slip about a possible IPO in Dubai, suggesting this is the start of new wave of listings.
Top UAE lawyer’s little message with big implications
Journalists at a casual event last week – the launch of a book jointly published by Jumeirah hotels group and the legal firm Al Tamimi & Co about doing business in Dubai – got rather more than they bargained for.
After some fairly standard comments about the emirate’s economic recovery and the improving prospects in the run up to Expo 2020, Husam Hourani, Al Tamimi’s managing partner, dropped a small bombshell into the sedate proceedings: One Dubai firm, with a minority government shareholding, was planning to seek approval for an initial public offering on the Nasdaq Dubai stock market that would kick-start the Dubai financial markets and herald a string of flotations both in the UAE and overseas.
With IPO-fever raging in the Emirates, Mr Hourani’s comments were guaranteed to attract headlines, and so it proved. They also got telephone lines buzzing in the Dubai International Financial Centre, highlighting the centre’s apparent inability, for several years back, to attract IPOs.
Mr Hourani, generally reckoned to be one of the top lawyers in the region in a firm regularly ranked in the upper tier of the UAE’s legal infrastructure, has his finger on the pulse of the financial and banking world.
“What I think about Nasdaq Dubai is this: As a platform and as a market provider it is the best option available for investors in the UAE. It is a compromise between what investors want in the region, and what they might get from going abroad for an IPO,” he says.
He believes Nasdaq Dubai “ticks all the important boxes” on many investors’ priority list, such as the desire for a “sell down” of founders’ shares and capital raising, book building and unlimited foreign ownership.
Mr Hourani believes that these advantages outweigh the reservation that some investors may have about Nasdaq Dubai, mainly due to historical problems of overpricing of IPOs or weak performance in the aftermarket, and could be the start of a new era for Dubai’s capital markets.
“I think we will start to see things happening on Nasdaq Dubai. It is regaining confidence and volumes,” he says.
He also sticks by the story of the Dubai company with a government minority stake heading for market, though with the proviso that management plans are at an early stage and shareholders have yet to agree the move.
Al Tamimi, and Mr Hourani, have been involved closely with government plans to modernise commercial company law in the UAE, helping to draft the legislation, now thought to be in its final stages.
“We all learnt lessons from the financial crisis. Basically, we need more laws and regulations, in real estate, bankruptcy provision and restructuring,” he says.
The raft of new legislation being planned would change the legal infrastructure of the UAE significantly. In addition to new parameters for listings on the other stock exchanges – the Dubai Financial Market and the Abu Dhabi Securities Exchange – it is believed new bankruptcy legislation will be introduced, giving the UAE an equivalent of the American Chapter 11 provisions to streamline the bankruptcy process.
Mr Hourani agrees these are necessary changes. “We are a young country, and never experienced such a financial crisis before. It has been a learning experience. The interaction between local courts and the DIFC Courts has been a positive thing, lifting standards right across the UAE legal system.”
A whole new layer of legal infrastructure is being planned to regulate the Abu Dhabi Global Market, the financial free zone planned for the capital. Mr Hourani says that this is a good thing for the legal system, and for the financial firepower of the UAE.
“Dubai is already established as a regional financial hub in the Arabian Gulf, but the new Abu Dhabi market will offer advantages in specific areas. If your focus is on wholesale banking or commodities trading or wealth management, I believe an institution would get specific benefit from the new market, but of course it is early days there,” he says.
Another priority on Al Tamimi’s radar is Iran. The possibility that United States-led sanctions might be lifted after a deal on the country’s nuclear programme has got law firms, as well as business generally, excited about the potential to renew commercial ties with the country.
“We would be very interested in exploring the possibilities of relationships with Iranian law firms. We are planning a visit to meet with potential friends or associates. We want to understand the Iranian legal market more,” he says, pointing out that Al Tamimi was one of the first firms into Iraq after the Saddam regime was overthrown.
The firm, 25 years old this year, has been GCC-centred for most of its history, but Mr Hourani wants to give it a broader Middle East perspective, with plans to expand to Egypt, Libya and Lebanon, in addition to the Iraq and Jordan operations. An office in Bahrain is also on the cards.
But he says the firm will retain its independent, non-affiliated stance, unlike other UAE firms that have sought international alliances.
“We have received proposals from tier one global firms to merge, but our decision, after consultation with the partners, has always been ‘no’. We’re proud of what we’ve achieved as a independent firm,” he says.
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