American Co's IPO Big News for DIFX

'This is one of a chain of IPOs from the US that we have lined up for the DIFX,' said group chief executive officer of co-lead managers Daman, Shehab Gargash. 'All the companies have been specially selected by us for the quality of their management and business models. We want to be ahead of the business cycle in promoting promising companies and not late like in the dot-com days.'

Nanodynamics will become the first of these companies when its shares are listed on the DIFX next week. The IPO has been via a placing with half the shares going to US institutions led by Fidelity, and the balance to regional institutions and high net worth investors.

The 9,100,000 shares have been priced at $11 and Daman forecasts a $30 target price in 12-18 months, and expects a lively aftermarket when retail investors can buy the stock for the first time next week.

Interestingly Nanodynamics, a New York based firm dedicated diversified technology and manufacturing using nanotechnology, has chosen the DIFX for its IPO over a listing on the giant Nasdaq stock market. Why has it done this?

'The main clients for this technology are not in the US, and we value the technology of the DIFX platform,' explained co-lead manager Global Crown Capital CEO Rani Jarkas speaking on behalf of Nanodynamics. 'We are convinced this will be an important and beneficial listing for the DIFX which represents a good play on Asia and the Middle East'.

In other words, Nanodynamics is likely to secure a better shareholder base and higher market capitalization through a listing in Dubai. And in a sense this is nothing different from Citi going to Abu Dhabi recently to seek new capital. Going where the money is makes good sense, especially in unstable global capital markets.


A buy?
Will Nanodynamics stock prove a good buy for local punters? Daman has a strong reputation to protect in Dubai and is unlikely to be promoting a dog. Indeed, Nanodynamics is an acknowledged leader in its field of alternative technology with half of its 150 staff being scientists or holding PhDs.

But this is a loss-making company with no profit track record. Revenues are forecast to rise from $40m this year to $80m in 2009 and $180m in 2010 with a $1.38 per share profit. But profits are not anticipated before 2009.

After the IPO the market capitalisation of Nanodynamics, with around a third of its shares in free float, will be $475m. Some might argue that this is quite a market capitalisation for a company at such an early stage of its life, with 'negative profits' as the stock broker jargon puts it.

However, if such firms get a good reception on the DIFX then it looks like there are going to be a stream of listings crossing the Atlantic and heading to Dubai. (via ameinfo.com)

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Borse Dubai - The Umbrella to Borse Dubai

DFM is known to everyone and so is DIFX. But recently the media started talking about Borse Dubai. Some searches on the net pointed out Borse Dubai to be DIFX, until i found the website for Borse Dubai itself. According to the website of Borse Dubai is:

"Borse Dubai is the holding company for Dubai Financial Market (DFM) and Dubai International Financial Exchange (DIFX). Borse Dubai was created 6 August, 2007 to consolidate the Government of Dubai’s two stock exchanges as well as current investments in other exchanges, expanding Dubai’s position as a global capital market hub."

The site goes on to explain Dubai Financial Market as:

"The Dubai Financial Market (DFM) was established in March 2000 as a public institution having its own independent corporate body. It has recently turned itself into a public shareholding company and lists its shares on its own platform; a first in the region. Its goal is to create a fair, efficient, liquid and transparent marketplace that provides choices through the best utilization of available resources in order to serve all stakeholders. DFM is operating as a secondary market for trading of securities issued by public joint-stock companies, bonds issued by the Federal Government or any of the Local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the Market."

Dubai International Financial Exchange is introduced as:

" Launched in September 2005, the Dubai International Financial Exchange (DIFX) is the region’s first international exchange.

A liquid and transparent electronic market with equities, Sukuk, conventional bonds and structured products, with standards comparable to those of leading international exchanges in New York, London and Hong Kong, the DIFX enables regional and international investors and issuers to share in the rapidly growing wealth of its region."

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DIFX turmps OMX bid to $5.3 billion

Borse Dubai has secured funding of as much as $5.3 billion to finance its takeover bid for Nordic stock exchange company OMX, a person familiar with the matter said.

The funding is enough to finance an offer of as much as 300 crowns per share for Stockholm-based OMX, about 30 per cent more than the 230 Swedish crowns per share the Gulf stock exchange operator has offered so far, said the person.

HSBC Holdings Plc has been advising the state-owned bourse on its bid.

A Swedish economic crimes unit said on Wednesday it was considering an investigation into Borse Dubai's $4 billion takeover offer for OMX, and would decide within days whether to proceed.

However, any potential criminal investigation into Borse Dubai's trading in OMX shares wouldn't automatically disqualify it as an eventual owner of the Nordic stock exchange operator, Swedish officials said yesterday.

Robert Engstedt, public prosecutor at the Swedish National Economic Crimes Bureau, said he was "looking at the trading" in regards to OMX shares, including "any physical person" involved in the trading.

"We look at whether there's reason to believe that someone with insider information has been trading," Engstedt said.

Borse Dubai expects any Swedish investigation surrounding OMX to focus on trading in stock of the Nordic bourse operator rather than its $4 billion bid, an official said yesterday. "If there is any investigation, it won't be into Borse Dubai; it will be into trading surrounding the bid," said the official.

Impact

The findings could have an impact on the investigation that Sweden's Financial Supervisory Authority, or Finansinspektionen, will undertake as soon as Borse Dubai files an ownership application with the regulator and it will assess whether it would be a suitable owner of OMX.

Gent Jansson, deputy director general of Finansinspektionen, said, "We will assess whether we think there's risk that the owner of a qualified stake risks undermining a sound development of the business. [But] that doesn't mean that any breach of law is disqualifying."

The Financial Markets Adviser's Committee - analysing how a change in ownership would affect OMX's users - will present its findings by September 28. via GulfNews

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DIFX eyes Karachi Stock Exchange

State-run Borse Dubai said yesterday it would be interested in acquiring a stake in the Karachi Stock Exchange if and when members of Pakistan's biggest bourse agree to turn it into a company.
Interest in the South Asian exchange "would be part of the general interest for Borse Dubai", Borse Dubai Chairman Essa Kazem told Reuters by telephone.

Borse Dubai, which owns two exchanges in the Gulf Arab emirate, is bidding to take over Nordic exchange operator OMX
for $4 billion - trumping an offer from Nasdaq - as part of a strategy to expand in Europe, the Middle East and South Asia.
"We are open to expansion and are looking at any other opportunities," Kazem said, declining to be more specific.

He would not comment on a report in The Daily Telegraph yesterday that the company may buy Nasdaq shares in the London Stock Exchange and then bid jointly with the US company for OMX. Pakistan's chief securities regulator, Razi-ur-Rahman Khan, told Reuters last month that OMX and a Dubai exchange were among parties expressing an interest in the Karachi bourse.

He did not identify the Dubai exchange. Borse Dubai owns Dubai Financial Market Co and the Dubai International Financial Exchange, which operates according to international regulatory standards.

The KSE said in June it planned to list shares by year-end under a plan requiring members to sell more than half their holding. The exchange may sell more than 10 percent of its stock, Khan said.

"They still have to go through the demutualisation and valuation process, so the structure is not there yet," Kazem said.

Demutualisation separates trading rights from ownership. Deutsche Bank is valuing the exchange. via Bahrain Tribune

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OMX- Dubai Reps Meet

Representatives from Sweden's OMX AB and the Dubai stock exchange were expected to meet Monday about a major stock purchase last week by Dubai that could set up a bidding showdown with the Nasdaq Stock Market for the Nordic stock exchange operator.

OMX spokeswoman Heidi Wendt said representatives for OMX, including its Chief Executive Magnus Bocker and Chairman Urban Backstrom, and Borse Dubai were meeting in Stockholm on Monday, but declined to give details on when or what would be discussed.

"This is a meeting on their request. I can't give more details," she said.

The Swedish government, which is the second-largest shareholder in OMX with a 6.6 percent stake as of June 29, said it met with Borse Dubai representatives Monday, but there was no bid.

"If such is presented, the government will review it," Karin Forseke, the government's adviser, said in a statement.

Investor AB, OMX's largest shareholder with 10.7 percent, declined comment.

"We will meet them in the near future, but I won't answer on exactly when or where that will happen," Investor spokesman Fredrik Lindgren said.

Borse Dubai, owner of the Dubai stock exchange, said Thursday it had bought a 4.9 percent stake in OMX, worth 230 kronor ($34) per share, and that it had entered option agreements to raise its stake in OMX to 27.4 percent at the same price.

The announcement surprised Stockholm-based OMX, which said it had not received any further information about Borse Dubai's intentions and had received no offer besides that of Nasdaq, which made a bid for OMX in May.

OMX shares jumped 6.7 percent Thursday on news of the investment. On Monday, they closed up 2 percent to 234 kronor ($34.40).

Nasdaq last week urged OMX shareholders "to take no action with respect to the conditional offer by Dubai for a minority stake in OMX."

Nasdaq, which earlier this year lost its bid for the London Stock Exchange, offered 208.1 kronor ($30.90) per share, to be paid in cash and shares. The offer, which is dependent on Nasdaq's share price and the Swedish exchange rate, has since dropped to around 203.5 kronor ($30) per share.

Nasdaq declined to comment on the talks between Dubai and OMX, saying it stands by its previous statements, which also included remaining "fully committed to its recommended offer for 100 percent of OMX."

Bo Albertsson at Hill & Knowlton, a spokesman for Borse Dubai, said representatives including Per Larsson -- the chief executive of the Dubai International Financial Exchange and the former chief of the Stockholm-based bourse -- would be present in Stockholm.

Larsson left OMX in 2003 after helping the Swedish stock exchange begin its takeover of exchanges in Finland, Estonia and Latvia. The company also launched an unsuccessful bid for the London exchange in 2000. source-boston.com

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Swedish Politics Seen Key In OMX Takeover Deal

Swedish politics could be more significant than money in the sale of OMX AB, amid moves by Nasdaq Stock Market Inc to shore up its finances ahead of a possible increased bid for the Nordic exchange operator.

Nasdaq said Monday it is reviewing options for its 31% stake in the London Stock Exchange Group PLC, worth around $1.58 billion, a move market-watchers see as a precursor to a higher bid for OMX.

Nasdaq's initial $3.7 billion offer for the exchange operator on May 25, was trumped Friday by a $4 billion offer from government-owned Borse Dubai.

"What's more important right now is politics, not money," said Cheuvreux analyst Fredrik Gutenbrant. He highlighted Borse Dubai's large state ownership, and pointed out that the center-right Swedish government is selling its 6.6% OMX stake as part of its drive to reduce state ownership.


Mia Widell, spokeswoman for Swedish Financial Markets Minister Mats Odell, said Monday that Borse Dubai's state ownership is relevant. "This is one of the things we're looking at," Widell added.


Other Swedish lawmakers also expressed concern about the ownership of the Dubai bourse.


Bertil Kjellberg, a member of the ruling coalition's Moderate party, said he is "hesitant" about OMX being sold to Borse Dubai because "it would replace a state owner with another state owner."


Karin Pilsater, chairman of the Swedish parliamentary committee on industry and trade, said the Swedish government had made a commitment to reduce state ownership of OMX and added that Dubai's "type of government is, to put it mildly, different" to Sweden's.


"The government can't sell OMX to another state-run company," said Chevreux's Gutenbrandt. "Especially when that state is undemocratic."


However, with a less than 10% stake in OMX, the Swedish government alone wouldn't be able to block any OMX sale. Investor AB and Nordea Bank AB, two of OMX's largest shareholders, said Monday they continue to support U.S. exchange's offer for OMX but are evaluating Borse Dubai's bid.


Analysts say the government could raise its OMX stake to somewhere above 10% to secure a blocking minority. They say also that Investor -- which is the investment vehicle of Sweden's Wallenberg family -- isn't likely to make a move that was politically sensitive.


"We're analyzing the new offer," said Fredrik Lindgren of Investor, which has a 10.7% stake. He added, "It's not self-evident" that the Borse Dubai bid is better than the Nasdaq bid.


"Nordea still supports the Nasdaq bid. That hasn't changed," said Boo Ehlin, spokesman for Nordea, OMX's third largest shareholder after the Swedish government.


OMX shareholders who backed the Nasdaq bid agreed not consider rival bids below SEK220 a share.


"But since we are allowed to consider other offers more than SEK220 a share we are now free to analyze the Borse Dubai bid," said Ehlin Monday.


Chevreux's Gutenbrandt said a raised Nasdaq bid "will help the Swedish government justify selling to Nasdaq." He added that a refusal to sell to Borse Dubai "would show that they are really committed to not having state ownership" and that it would be "easy political points' for the government.


Fredrik Reinfeldt's center-right government, which swept to power in September after 12 years of social democratic rule, has consistently trailed in the polls this year.


OMX shares traded up SEK6, or 2.4%, at SEK238 Monday at 1440 GMT, outperforming a 1.2% rise in the broader Stockholm market.

---By Joel Sherwood, Dow Jones Newswires, courtesy Zawya.com

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DIFX TraX Platform gets new Merrill Lynch Certificates

Merrill Lynch today announced that it will list two new certificates (Tracker-10YIT-Dubai and ReverseT-1YRC-Dubai) on the DIFX TraX, the recently launched structured products platform of the Dubai International Financial Exchange (DIFX).

Both certificates will be linked to the Dubai Investable Index, the first index designed to track stocks listed on the Dubai Financial Market (DFM), which Merrill Lynch launched in November 2006.

Tracker-10YIT-Dubai will track the value of the Dubai Investable Index allowing investors to take an immediate broad and liquid exposure to the Dubai equity market.

ReverseT-1YRC-Dubai will be the first listed reverse convertible linked to the Dubai Investable Index. It will guarantee a fixed coupon of 9.5% and the initial investment on inception date will be safe as long as the Reference Index does not drop by 20% or more at anytime during the one year maturity of the Reverse Convertible.

Hedi Ben Mlouka, head of CEEMEA Equity Derivative Sales at Merrill Lynch said: 'The launch of the Dubai Investible Index signified a milestone in the development of the derivatives market in the MENA (Middle East and North Africa) region. Now Merrill Lynch's launch of two new certificates reaffirms our commitment to driving growth in this important market and leading innovation through the development of derivative instruments for clients and the wider GCC market.'

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