DUBAI: Abu Dhabi is hoping to fast-track at least $5 billion of stock market listings by state-backed companies next year before Saudi Aramco’s planned $100 billion IPO dominates investor demand.
Like neighboring Saudi Arabia, Abu Dhabi is restructuring its industrial sector, hoping to lure foreign investors with privatizations after lower energy prices depleted its coffers.
This could result in at least five large listings, including the fuel distribution unit of Abu Dhabi National Oil Co., aluminum-maker EGA, industrial conglomerate Senaat and Abu Dhabi Ports, government and banking sources said.
Bankers had pitched for the Abu Dhabi Ports IPO, but no decision has been made and the company has said there are no immediate plans for listing.
The IPOs could raise at least $5 billion, several of the sources said, exceeding money raised through listings in the UAE over the last five years, according to Thomson Reuters data. A total number of 13 IPOs have raised $4.49 billion since 2012.
Bankers said the companies hope to complete their IPOs before Saudi Arabia’s IPO of its crown jewel Saudi Aramco either in late 2018 or early 2019 as part of a wider multi-billion dollar privatization program.
Sanyalaksna Manibhandu, head of research at First Abu Dhabi Bank, said the aim was to get ahead of the IPO of Saudi Aramco and the upgrade of MSCI Saudi Arabia to emerging market status.
Government-owned companies in Abu Dhabi have been told to manage budgets efficiently and control spending and possibly raise their own finances for expansion to make them less reliant on the state, a source close to the government said.
“Abu Dhabi is taking bold measures to kickstart the markets and boost investor confidence by pushing government-related entities to sell shares and list publicly,” said an Abu Dhabi-based senior bank executive who has advised on deals there.
At the same time, Abu Dhabi-based companies spanning sectors such as banking, insurance, services and health care are also expected to go through more consolidation, the sources said.
Last year Abu Dhabi merged its two sovereign wealth funds, Mubadala and IPIC, while National Bank of Abu Dhabi and First Gulf Bank created one of the largest banks in the Middle East and Africa.
“When we were a very young country, you could have multiple companies and you basically had to grab your domestic market share. Now it’s time to reach the size where we need to export our services, export our business,” said Sabah Al-Binali, a UAE-based investor.
Abu Dhabi is using tougher economic conditions to push through reforms that would have been harder to implement in previous years, when higher oil prices boosted its revenue.
“The good old days of the state bearing the weight of spending and providing subsidies because of rich resources is over. That model is outdated,” an Abu Dhabi-based banker said.
“The private sector has to bear the burden too now, something Abu Dhabi has realized.”
Abu Dhabi targets IPO frenzy ahead of Saudi Aramco
Abu Dhabi targets IPO frenzy ahead of Saudi Aramco
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
