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IPO Summit - Focus on Market Stability

The prospects for regional initial public offerings (IPO) in 2007 will be the focus of a major conference in Dubai next month. Dubai-based IIR Middle East will organise the 2nd Middle East IPO Summit 2007 from March 24 to 29 at the Madinat Jumeirah, Mina A’Salam.

The summit will help restore investor confidence and market stability after a volatile performance in 2006, which saw $436 billion wiped off GCC market capitalization, said a spokesman. Andrew Jeffreys, editor-in-chief, Oxford Business Group, commented: “Investment experts, regulators and business leaders need to collectively discuss the current IPO environment throughout the region and to positively influence the direction of the markets they inhabit.”

Although Oman, Bahrain and Kuwait recorded modest gains, the bourses in Saudi Arabia, Qatar, Abu Dhabi and Dubai saw red as the markets headed south for most of the year. According to figures released by the Arab Monetary Fund (AMF), these four bourses together lost a staggering $436 billion, with the Saudi market losing over $320 billion, nearly half of its recorded market capitalisation at the beginning of 2006.

Abu Dhabi and Dubai also saw their market capitalisation plummet, with losses of $60 billion (45 per cent) and $26 billion (23 per cent) respectively. Qatar’s financial market was not immune to it either. The Doha Securities Market witnessed the market capitalisation of its 33 listed companies plunge by $28 billion (32 per cent) in 2006.

Regional traders charged speculation, insider-trading, lack of transparency and disclosure and uninformed investors, as the key issues responsible for the catastrophic market performance. However, according to the International Monetary Fund (IMF) it was more a case of excess liquidity and the lack of depth in the regional markets that were the underlying causes. Indeed at the end of 2006 there were only 1,607 companies listed on all 14 Arab bourses combined, 58 less than the year before.

Deep Marwaha, conference manager for the summit, said: “IPOs can redress the balance between liquidity and market depth. They can also enable private and family-owned companies, which make up 90 per cent of the region’s businesses, to realise their value or to raise additional capital, representing great potential for future listings.”

Debate and discussion amongst investment experts, regulators and market leaders will centre on regulatory and industry standards, corporate governance and transparency, reporting standards and internal audit, management changes and restructure. It will also address the costs associated with IPOs and the long-term obligations of public companies as well as the critical factors underpinning oversubscriptions, over-pricing and macro-economic issues affecting IPOs.

Two dedicated workshops have also been organised and will examine IPO feasibility studies that assess how to prepare for listing and structuring a successful IPO. New this year is a four-day, in-depth seminar entitled “Certified IPO Specialist”, which runs for two days pre and two days post of the main conference.

An impressive line-up of international and regional financial experts are expected to speak at the event including amongst others, Henry Azzam, chairman, Dubai International Financial Exchange, Habib Mulla, chairman, Dubai Financial Services Authority, Vivek Rao, head of finance, Tamweel, Zahed Chowdury, head of Middle East Research, Deutsche Bank, Mark Hanson, head of corporate finance, Saudi Hollandi Bank, Omar M. El Quqa, executive VP – corporate finance & treasury, Global Investment House and Mahmoud Salem, VP – Business Development and Depository Receipts MENA, Bank of New York. Global Investment House is the diamond sponsor of the summit.-(via TradeArabia News Service)

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