Gulf IPOs Signal Investor Confidence Amid Varied Market Responses
Dubai Residential REIT's debut on the Dubai Financial Market marked a significant milestone, closing nearly 14% higher at AED 1.25 per unit from its offer price of AED 1.10. The $584 million offering, backed by Dubai Holding, attracted overwhelming demand, with the IPO oversubscribed 26 times, reflecting strong investor confidence in Dubai's residential real estate sector.
The REIT, focusing exclusively on residential leasing, launched with a market capitalisation of AED 14.3 billion and projects a gross dividend yield of 7.7% for 2025. Analysts attribute the robust performance to Dubai's post-pandemic property boom, bolstered by foreign investment and residency reforms.
In contrast, Saudi Arabia's United Carton Industries Co. experienced a subdued market entry. The company's shares fell 1.5% on their first trading day, closing at SAR 49.3, below the IPO price of SAR 50. Despite the IPO being 8.9 times oversubscribed, the stock's performance was hindered by profit-taking and concerns over valuation amid tariff uncertainties. UCIC's Q1 2025 profit declined by 46% to SAR 18.7 million, further dampening investor sentiment.
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Looking ahead, Saudi Arabia's IPO landscape remains active. Flynas, the low-cost airline backed by Prince Alwaleed Bin Talal, launched its IPO aiming to raise SAR 4.1 billion by offering 51.3 million shares at SAR 80 each. The offering garnered significant interest, with institutional investors oversubscribing 100 times. The IPO, representing 30% of the company's capital, is expected to fund fleet expansion and route diversification, including new services to Damascus.
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