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It’s peak IPO season in Dubai, with a succession of companies trying to capture the ever-growing retail investor demand for quality stock picks. Even as other stock markets – such as the red-hot one in the US – as well as assets such as gold and Bitcoin also try to draw in more investments their way.
For the DFM and ADX, it’s been an interesting year, with both of the UAE’s stock markets signing up new investors to trade in listed stocks. The returns for these investors have been solid, with some recently listed companies continuing to offer bumper returns.
In an interview, Amer Halawi, head of Research at the securities company Al Ramz, offers his take on what individual investors should keep an eye on.
While shares of most recent government-owned entities that went public are doing well, some private companies are yet to find their feet with investors. Is that going to be a real concern with retail investors?
Some short-term oriented people might want to make a lot of money on the first day of listing. But the real value in IPOs comes when companies enter the market with a good business model and need money to expand over the course of the next few years.
If we look at the overall performance numbers for IPOs in the GCC in the four years since 2021, the numbers on average are 13 per cent up on the first day, 19 per cent in the first week, 22 per cent the first month, 25 per cent the first three months, and then 25 per cent plus over six months, and so on.
On average, across the cycle, IPOs are doing double digit performances, from inception until the first year of the IPO. This in any book is a good performance.
Of course, there are divergences between countries. So Saudi Arabia’s IPOs is not going to be the same as the UAE. Abu Dhabi is going to be different from Dubai’s. We find that the Dubai IPOs perform at par with Abu Dhabi over the long term, but in the short term they don’t perform as well. So there’s going to be some granularity, but overall the IPO cycle in the GCC is solid.
But that sustained level of share price gains don’t seem to be happening this year…
This year, the cycle is not as strong as it usually is. If I look at the first half of 2025, the number of Gulf IPOs is comparable to the first half of 2024 – 20 deals this year, 22 deals last year.
By total proceeds, we’re up 26 per cent, so $4.76bn raised in H1 2025 versus $3.77bn raised in H1 2024. This by any standard is a very, very good performance.
The UAE is a different story – it is weaker, and the proceeds for the UAE are almost half of what they were in the same time period last year. So, let’s recap the IPOs. The IPO cycle is strong, it’s solid.
People are complaining because they’re not making as much as they used make before, but we’re still in a good place.
So your message is consistent for retail investors – own for the long term?
My response is that IPOs are doing better long term and that they continue to do well. So just like every other investment, if you expect to get rich quick, this is not the place. If you go for value, if you identify the fundamentals, then yes, you have a chance.
You have the domestic and global funds lining up as cornerstone investors in UAE and Gulf IPOs. But what about fund inflows into secondary market action?
It’s not just about IPOs, and it’s not just about older listed companies or new listings. It’s about the wider investment landscape. The stock market performance has been incredible in the UAE. It was a bonanza for investors buying secondary stock. This is where the real money was.
We saw expansion in the market capitalization of the DFM by a very significant measure. Foreign institutional flows have increased and the performance for anybody who was in the market or went in – let’s exclude IPOs for a second – is really, really good.
The IPOs did not do as well, but another part of the ecosystem did really, really well. And so if you think of the ecosystem as a whole, the ecosystem is doing well.
