UAE stock market cap surges by $5.79bn in 2024 with strong IPO activity

The UAE’s stock market capitalization has surged by 21.3 billion dirhams ($5.79 billion) this year, thanks to three new initial public offerings launched since the beginning of 2024, according to a new analysis.

Alef Education Holding, Parkin, and Spinneys 1961 Holding, were the firms to float on the market, and the moves significantly boosted liquidity, increased investment attractiveness, and reinforced the UAE’s position as a premier financial and business hub globally, according to the Emirates News Agency.

These IPOs came as the market value of listed stocks in the UAE grew by over 444.5 billion dirhams throughout 2023, pushing the total market capitalization to 3.651 trillion dirhams by year-end.

This growth fits in with the ambition of the country to double its stock market value to approximately 6 trillion dirhams in the coming years.

Alef Education Holding’s IPO, the first on the Abu Dhabi Securities Exchange in 2024, led the way in 2024 with a market capitalization of around 9.45 billion dirhams. The company raised 1.89 billion dirhams by selling 1.4 billion shares, representing 20 percent of its total shares, at 1.35 dirhams per share.

The IPO saw strong demand, surpassing the target subscription value by 39 times, even after the individual investor allocation was increased from 8 percent to 10 percent.

Dubai’s exclusive operator of paid public parking, Parkin, achieved a market capitalization of 6.3 billion dirhams upon its March listing on the Dubai Financial Market, marking the first listing of 2024.

Parkin’s listing garnered substantial interest from both international and regional institutional investors, along with individual investors in the UAE, resulting in total subscription requests reaching approximately 259 billion dirhams — nearly 165 times the subscription value.

This strong demand underscores investor confidence in the company’s growth strategy as a robust investment opportunity, backed by the city’s steady economic performance and population expansion.

In May, Spinneys 1961 Holding achieved a market capitalization of 5.5 billion dirhams upon its listing on the DFM, following a widely subscribed public offering.

The premium grocery retailer attracted significant interest from regional and international investors, including institutions and individuals in the UAE, with total subscription requests amounting to approximately 71 billion dirhams.

Demand exceeded the offering size by 64 times across all investor segments, excluding the anchor investor, marking the highest demand and coverage ratio for non-governmental IPOs on the DFM in recent years.

A report titled “IPO+ Watch” by PwC in May indicated that IPOs in the Middle East are expected to continue their positive aftermarket performance in 2024, following significant gains in the first quarter.

The report highlighted that private sector companies seeking liquidity and access to capital are anticipated to drive much of this activity, with Saudi Arabia and the UAE leading the way.

Additionally, there is increasing momentum in markets such as Oman and Qatar, signaling broader regional expansion in IPO activity.