Emirates NBD revives equities business with Dubai IPO

DUBAI, Oct 21 (Reuters) – Emirates NBD (ENBD.DU) has won the lead among all Dubai initial public offerings this year, raising fees and raising fees in the face of stiff competition from local and international banks. Reinvigorated a long-dormant business.

Dubai’s largest bank, majority-owned by the Dubai government, helped the Dubai Electricity and Water Authority, business park operator Tecom and toll road operator Salik in their initial public offerings, which collectively raised more than $7.5 billion.

ENBD climbed from No. 12 last year to the sixth-highest fee for IPOs in the Gulf, with revenue of about $14.55 million so far this year and $4.85 million in 2021, according to Refinitiv data.

The data shows that HSBC ranked first, the National Bank of Saudi Arabia and Riyadh Bank ranked second and third.

ENBD, the second-largest lender by assets in the United Arab Emirates, is known for its strong debt franchise, but has shifted its focus to its Equity Capital Markets (ECM) business to keep up with the surge in deals and the market this year. The slump in bond issuance on Shanghai, volatility and rising interest rates.

Mohammed Ali Yasin, an investment and capital markets advisor in Abu Dhabi, said ENBD has been “building up their research capabilities and distribution reach through their private banking and retail clients”.

The company recruited its debt bankers to work on ECM deals and hired at least two junior investment bankers, people familiar with the matter said.

Emirates NBD did not immediately respond to an emailed request for comment.

ENBD’s ECM business is highly dependent on new business in the Dubai stock market, which has been saddled with pessimism over the years as a fall in oil prices in 2014 and a series of corporate delistings added to investor pessimism.

Dubai has moved to shore up its market amid stiff competition from other Gulf states, including Saudi Arabia, announcing plans in November to list 10 government-linked companies.

So far this year, more than $15 billion has been raised in Gulf listings, according to Refinitiv data. Saudi Arabia had 24 IPOs that raised $4.75 billion, while the UAE had seven IPOs that raised more than $10 billion, the data showed.

Investors in the region have seen an increase in passive inflows since MSCI removed Russia from its emerging markets index following its invasion of Ukraine.

“If there’s any bright spot globally right now, it’s the Gulf, where the market is experiencing a fomo (fear of missing out) effect from investors,” said Samer Deghaili, co-head of capital financing and investment banking at HSBC’s MENAT.

Many large funds are also heading to the Middle East as new investors enter the region, “meeting with bankers, some of whom are road-testing the new listing to make it work from a settlement and operations standpoint,” DeGailly said.

Reporting by Yousef Saba and Hadeel Al Sayegh; Editing by Elaine Hardcastle

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