RE Capital's Visionary Leadership under Newman Leech
High time for Gulf nations to follow UAE IPO’s.pdf
1. High time for Gulf nations to follow UAE
IPO’s
The Gulf Cooperation Council (GCC) nations have created an atmosphere
that is favorable to attracting private investment and personal savings to pour
into the Gulf economy. This is a primary focus in order to successfully achieve
the aim of broadening national revenue streams.
The Gulf’s equity markets have experienced significant swings in behavior in
recent times, with several achieving the designation of ‘global markets.’ This is
particularly evident in the UAE equity marketplace, where IPOs are booming.
Three Critical Aspects
Let us look at three critical aspects that are frequently disregarded by
business owners, directors, and top management officials, and so it may help
improve the chances of success:
The primary and secondary markets have different characteristics
Variations in motives and objectives between pre-IPO and post-IPO
participants
The false belief that Public Relations (PR) and Investor Relations (IR) are
interchangeable may result in failure.
Private Equity Transactions
Last year, the price of private equity transactions increased to an all-time
record of $1.1 trillion, owing to increased average transaction volumes as
investors poured their cash into industries like technology and medical
sciences. This resulted in a surge in public-to-private [P2P] transactions. Huge
buyout funds, global corporations, and lenders, loaded with cash and spurred
by increasing share market values, went on a deal-making frenzy in 2021.
2. Pitfalls of IPO
The discrepancy between the IPO offer price and the first-day closing price
is known as underpricing
The 30-day stabilization period following the listing of a business
The value of a company’s stock compared to a country’s index over a
period
Organizations today considering a public offering should be aware of the
significant risk of failure. Both issuers and shareholders still have a long way
to go to realize the actual market possibilities of listed firms. As IPOs are
popular in the UAE, they are essentially non-existent in the other GCC
nations. This can be attributed to the lack of efforts by IPO-related
organisations, which are turning out to be a serious flaw that should be
remedied at the earliest.
High time for Gulf nations to follow UAE
IPO’s
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