NASDAQ Dubai sets up Advisory Group to prepare for SME IPO and listings market
- Vital funding for SMEs and high-growth companies will help to drive UAE’s economy forward
- Inaugural meeting discussed regulatory models and practical framework
- Market will be tailor made for regional and international issuers
NASDAQ Dubai has established an Advisory Group of experts to prepare for a proposed new market for small and medium-sized enterprises (SMEs), including high-growth companies, to offer shares to the public.
At its inaugural meeting, the Advisory Group discussed ideas about regulatory models and the ideal practical framework to attract issuers from the Middle East and around the world to carry out initial public offerings (IPOs) and other listings on NASDAQ Dubai.
As well as the exchange, the Advisory Group brings together Dubai SME, the agency of the Department of Economic Development mandated to develop the SME sector, and leading investment bankers, lawyers, accountants and investor relations experts.
Hamed Ali, Acting Chief Executive of NASDAQ Dubai, said: “High quality SMEs are vital to the expansion of the UAE’s economy, but many are starved of the capital they need to grow. An IPO on NASDAQ Dubai will enable them to raise the funds they need.”
“The Advisory Group is exploring a range of possibilities, including which regulatory and trading framework will be most effective for a market for SME and high-growth companies, as well as what types of advisory support they will need.”
Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, said: “Our participation in the Advisory Group underlines our commitment to help high quality SMEs, including high-growth companies, find the financial backing that they deserve. Dubai SME launched the SME sector development strategy in 2009, and the creation of an equity market for SMEs was one of the critical components of the SME ecosystem.
Many SMEs are held back from achieving their natural growth path simply by lack of capital and an IPO on NASDAQ Dubai offers an excellent route to expansion for the right companies.”
“The creation of an active equity market will act as a powerful driver for the continued growth of the SME sector, whose development adds critical strength to Dubai’s economy and generates high quality employment opportunities for its people. Internationally, Dubai will also be better positioned as a hub to attract more entrepreneurial high growth SMEs to be based here, adding greater value to the economy in the longer term”, added Al Janahi.
In June 2012 the Dubai Financial Services Authority (DFSA), NASDAQ Dubai’s regulator, reduced the minimum market capitalisation for an IPO from 50 million dollars to 10 million dollars.
NASDAQ Dubai proposes to build on this momentum to enable a market that caters for a wide variety of SMEs and high-growth companies, supported by access for issuers to IPO advice at affordable rates and offering a broad investor base as well as a liquid secondary market.
A market for SMEs and high-growth companies on NASDAQ Dubai would benefit regional and international issuers who wish to increase their visibility in Dubai, the region’s business capital, to help expand their activities in other countries.
More than 72,000 small businesses in Dubai contribute more than 40% to Dubai’s GDP. However many currently find it hard to access bank loans or other capital.
Expertise within the Advisory Group includes investment bankers, who guide an overall IPO process and help market a company to investors; lawyers, who handle legal and regulatory processes; accountants, who provide financial due diligence; and investor relations and public relations professionals who promote a company’s equity story.
NASDAQ Dubai has selected the Advisory Group members for their proven professional skills and successful track record. As well as the exchange and Dubai SME, the group currently comprises:
Al Tamimi & Co
Alpen Capital ME
Baker Tilly ME
Brunswick Gulf Ltd
Emirates NBD Capital Ltd.
Ernst & Young
Grant Thornton ME