|
|
|
|
| ||
DP World IPO - Dubai Ports World IPO
Home | New Investors | company results | Companies | UAE Brokers | Stock Forum | Latest posts | UAE news
Dubai Ports World Initial Public Offering (DPW IPO)
26 November 2007 - DPW listed today. Close price was $1.36 (AED 4.99), +4.6% from IPO price, with solid trading volumes of 303 million shares worth $420 million (AED 1.54 billion). Our DIFX ticker may supply live data but is erratic at present. DP World opening price topic has charts and updates from the first day of trading. Intra-day chart for first day is below.
25 November 2007 - Some Deutsche Bank, Merrill Lynch, Rasmalla clients miss out on DPW IPO shares. DPW shares list on the DIFX 26 November 2007.
23 November 2007 - final DPW share allotment appears to be 3500 shares plus approximately 4.8% of remaining application amount (but with large reported variations). Applicants paying by direct transfer have had refunds credited to their accounts.
21 November 2007 - DP World IPO final offer price announced as $1.30 and shares 15x oversubscribed. Retail investors will get 3500 shares plus a pro rata amount. Refund checks should be in the mail by Sunday 25 November 2007.
11 November 2007 - DP World shares information added (with summary of DP World history)
Dubai Ports World IPO introduction and background
On 21 October 2007, after months of speculation, the Dubai Ports World Initial Public Offering (DP World IPO or DPW IPO) was announced, with the IPO period from 04-15 November 2007, and DP World (DPW) listing on the Dubai International Financial Exchange (DIFX) on 26 November 2007.
The IPO is for 17% of DP World (2.882 billion shares) priced at $1.00-$1.30 per share, with an additional 3% (498 million shares) available as an over-allotment (greenshoe) allowance. Subscription eligibility is restricted to residents of the UAE (both Emirati and expat), and GCC nationals resident in a GCC country.
DP World is a subsidiary of Ports & Free Zone World, which is itself a subsidiary of the Dubai Government owned Dubai World. The total value of the DP World IPO will be $2.88 to $4.39 billion depending on the final share price and how many shares are issued. This makes it by far the largest IPO in the UAE, and possibly the largest in the Middle East. Previously, the largest IPO in the UAE was the AED 3.2 billion ($0.87 billion) Deyaar IPO in May 2007, at about a quarter of the size of the DP World IPO. The largest IPO in the region was AED 15 billion ($4.1 billion) raised by Saudi Telecom in 2003.
DP World IPO latest news and links
Dubai Ports World forum - IPO and other related discussion at the UAE stocks forum
- How many DPW shares will I get now? - 23 Nov 2007 - our estimate is 3500 shares plus about 4.76%.
- DP World IPO 15x oversubscribed and offer price set at $1.30, and analysis - 21 November 2007
- DPWorld IPO may be 19x oversubscribed - 21 November 2007
- DPW IPO demand strong, size increased, price expected to be $1.25-$1.30 - 19 Nov 2007
- DP World IPO closes - last day 15 November 2007, subscription demand unknown
- DP World subscription comments - not as easy as it seems?
- DP World financials - a brief review 11 November 2007
- DPW IPO leveraging - how risky? 05 November 2007
- DP World IPO application & broker questions - 05 November 2007
- DP World IPO launch - launched 04 November 2007, more analysis. Is $1 per share good value?
- DP World poll - will you buy into it? (29 October 2007)
- DP World report - some analysis based on forecasted earnings (26 October 2007)
- Dubai Ports World IPO dates - and other initial information and conditions (21 October 2007)
- DP World IPO analysis - news and some analysis (21 October 2007)
- DP World IPO - previous information, background and rumour leading up to the IPO announcement (Dubai Share Talk)
- UAE IPOs - previous and upcoming IPOs for the Dubai and Abu Dhabi stockmarkets
- UAE IPO forum - discussion topics about UAE IPOs
- www.uae-ipo.com - DP World IPO official website (external link)
DPWorld IPO information (04 November 2007)
| Total shares outstanding | 16.6 billion |
| Total shares offered | 2.822 billion (17%) |
| Over-allotment option | 498 million shares (3%) |
| DIFX listing date | 26 November 2007 |
| DIFX ticker symbol | DPW |
| Price range for IPO | $1.00 - $1.30 per share |
| Nominal Value | $0.10 per share |
| Dividend Policy (not guaranteed) | at least 20% of net profit |
| DP World IPO prospectus (466 pages, PDF) | download (within the UAE) |
| DP World IPO prospectus - DST topic | more download links |
| DP World sample application form (2 pages, PDF) | download (in the UAE) |
How do I apply for the DP World IPO?
- Check you are eligible to apply (see below).
- Open an account with one of the DIFX brokers for the DP World IPO. Some will require you to have a bank account with them or a related bank. Trading accounts are in $ or AED (dirhams), not all brokers offer both.
- Get a DP World IPO subscription form after 04 November 2007 from a broker or one of the receiving banks.
- Fill in the form, return it to the broker or receiving bank with your money, and wait.
DP World IPO eligibility
- UAE residents of any nationality (valid residence visa required).
- UAE and GCC nationals resident in a GCC country.
- International institutions "organised" under UAE or GCC laws.
Subscribers to the DP World IPO need to be at least 21 years old, and apply in person or through an authorised representative in the UAE (one of the brokers or receiving banks).
DP World IPO subcription application amounts
- Minimum amount is $6000 or AED 20,000 depending on currency used for payment.
- Increments of $2,000 or AED 5,000.
- Application fee of 0.5% of the application amount.
If the DP World IPO is oversubscribed, there is a minimum allotment amount of $2000 worth of shares per applicant, with the remainder being divided up pro-rata. It is unknown how likely it is that the IPO will be oversubscribed, or by how much if it is, since this is the first IPO in the UAE of this nature. Previous UAE IPOs have been listed on one of the local markets and were heavily oversubscribed due in part to the IPO price being fixed at par value of 1 dirham per share, often undervaluing the company.
Dubai Ports World IPO Important Dates
| Date | Event |
|---|---|
| 21 October 2007 | Announcement of Initial Public Offering (IPO) |
| 04 November 2007 | Start of UAE retail IPO application period. DP World IPO Prospectus available on DPW IPO website (www.uae-ipo.com), application forms and documents available from brokers and receiving banks. |
| 15 November 2007 | End of UAE retail IPO application period. |
| 21 November 2007 | Pricing of DP World shares for IPO |
| 22 November 2007 | DPW IPO allotment confirmation send to subscribers by SMS |
| 25 November 2007 | Refund checks and allotment letters sent to subscribers |
| 26 November 2007 | DP World shares listing date on the DIFX, and start of trading in DPW shares. |
Broker list for DP World IPO
| Broker | Telephone | Notes |
|---|---|---|
| Al Dhabi Brokerage LLC | 800-3325 | |
| Daman Securities LLC | 800-426325 | |
| Direct Broker for Financial Services |
800-3237 | Also called Mubasher or MubasherTrade |
| EFG Hermes UAE Limited | +971-4-3069333 | |
| Emirates International Securities | +971-4-3160260 | |
| Emirates Securities | +971-4-6271515 | |
| First Gulf Financial Services | 800-3437 | |
| Mashreq Securities | +971-4-3632222 | Need US$ account, tel orders only for trading. |
| Rasmala Financial Brokerage | +971-4-3098870 |
Receiving banks for DPW IPO
| Bank | Telephone | Notes |
|---|---|---|
| Mashreq Bank | +971-4-2211120 | 19 branches Abu Dhabi, Ajman, Al Ain, Dhaid, Dibba, Dubai, Fujairah, Ras Al Khaimah, Sharjah, Umm Al Quwain |
| Abu Dhabi Commercial Bank | +971-2-6275500 | 12 branches Abu Dhabi, Ajman, Al Ain, Dubai, Fujairah, Ras Al Khaimah, Sharjah |
| Emirates Bank | +971-4-3160316 | 20 branches Abu Dhabi, Al Ain, Dubai, Fujairah, Ras Al Khaimah, Sharjah |
| First Gulf Bank | +971-2-6816666 | 13 branches Abu Dhabi, Ajman, Al Ain, Dubai, Fujairah, Mussafah, Ras Al Khaimah, Sharjah |
Will I make money if I buy DP World IPO shares?
Well, the short answer is that if we knew that, we wouldn't be working for a living!
In the short term, possibly, given that all IPOs in the UAE so far have floated (first listed on a stockmarket) at a price greater than the IPO price, sometimes by a factor of several times. And the excitement generated by a number of firsts for the DP World IPO could see sufficient demand to move the price up as soon as it launches. Scroll down to see a table of recent UAE IPOs, listing prices and returns.
In the medium term (months to a couple of years) it's difficult to say as this depends more on being able to assess the value of the company and its earnings. Some earnings figures are available in the DP World prospectus, and estimates from other sources. So far, at a price of $1.00 to $1.30, the shares don't look like a bargain but this comment is based on limited information. See the DP World financial analysis topic for more comments, and the DP World 2007 H1 summary report. It seems unlikely that DP World would price their shares at such a level as to be unappealing to the large number of investors keenly interested buying into one of Dubai's successful companies.
In the long-term (more than 5 years), shares of profitable companies rise in value. The US and UK sharemarkets have increased by about 10-12% per year on average over the past century. DP World is a solid company operating in a business sector that is not going to disappear, barring any serious unusual or unforseen events, for example an ice age, meteor strike, or the availability of teleportation. Hence DP World will grow and be profitable so it would be reasonable to expect their shares to rise from the issue price at a greater rate than receiving a couple of percent on your bank deposit.
What about the DP World convertible bond holders?
The terms of the original Dubai Ports World convertible bond say that bondholders are guaranteed 30% of the value of their stake as a share allotment in the DP World IPO.
Previous IPOs in the UAE
UAE IPOs (all with IPO price of AED 1 dh, and listed on the DFM) listing in 2007 so far, close price on the first day of listing, and percentage changes from par value:
| Company | Listing Date | Float Price (AED) | change | 22 Oct 2007 | change |
|---|---|---|---|---|---|
| Air Arabia (IPO) | 17 Jul 2007 | 1.11 | 11% | 1.67 | 67% |
| Deyaar (IPO) | 05 Sep 2007 | 1.91 | 91% | 1.99 | 99% |
| Dubai Financial Market (IPO) | 07 Mar 2007 | 2.35 | 135% | 4.09 | 309% |
| Gulf Navigation (IPO) | 07 Feb 2007 | 1.29 | 29% | 1.37 | 37% |
Note that DP World IPO shares will not be priced at 1 dh each, the price will be determined by the market, so you would expect the price to be indicative of a fair value for DP World. The impressive looking increases for stocks in the above table are deceptive. Oversubscription rates were so high for DFM shares (300x), for example, that even at the float price of 2.35, many investors lost money by the time they repaid loans they had taken out to leverage their IPO investment.
What do all those words and acronyms mean?
- ADSM - Abu Dhabi Securities Market - one of three UAE stockmarkets.
- DFM - Dubai Financial Market - one of the three UAE stockmarkets.
- DIFC - Dubai International Financial Center - a free zone in Dubai where financial organisations are based, including the DIFX.
- DIFX - Dubai International Financial Exchange - one of three UAE stockmarkets, different from the other two in that it is intended to be a stock market for international companies. Also operates in a different regulatory environment and lists shares in US$ rather than UAE dirhams.
- DFSA - Dubai Financial Services Authority - the regulatory body for the DIFC and the DIFX.
- DPW - Dubai Ports World, more often referred to as DP World.
- GCC - Gulf Cooperation Council. The following Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates.
- IPO - initial public offering. The first time a company offers shares to the public. These are "new" shares. Owners of "new" shares can then sell them at a stock market to other people. So buying shares on the markets is like buying "second-hand" shares. A stock market is not necessary to trade shares but it makes it much easier - can you imagine trying to buy or sell shares through the Gulf News classifieds?
Any other questions about the DP World IPO?
Join the Dubai stock forum and ask in there - see the DP World section. Good luck!
Disclaimer: ShareWadi.com and DubaiShareTalk.com provide UAE stockmarket related information, but do not offer investment advisory services, or brokerage services. Investing in shares is risky, you can lose some or all of your money and/or other assets. Anything you read on this site should be regarded as the opinion of the author only and is not to be taken as advice to buy, sell, or hold shares and/or other investments. Do not make investment decisions without due diligence and/or professional advice. In particular, do not assume anything you read on this site is correct or accurate. You should make your own investigations to determine if information is accurate and ultimately, you should accept that you and you alone are responsible for any investing decisions you make.
Copyright © ShareWadi.com 2005-2008. Any company names or product names used on this site, discussion forum, and/or communications from anyone associated with this website are the trademarks or registered trademarks of their respective holders.
This page last updated 26-Nov-2007.
E & OE.