Abu Dhabi’s ADX expects increased listings in 2023

The Abu Dhabi stock exchange expects an increase in listings this year, even as global economies grapple with high inflation and rising interest rates, its chairman said.

“We have a healthy pipeline of IPOs and listings with aspirations to surpass 2022. There will always be challenges, but also opportunities,” Hisham Khalid Malak, chairman of the Abu Dhabi Securities Exchange (ADX) told Reuters on Wednesday.

The global picture is “starting to look better than expected, with a soft landing now forecast in the United States”, he said, adding that “Europe is also starting to look better and China is opening up.”

The Gulf’s second-biggest market last year featured five initial public offerings (IPOs) and two dual listings, as well as listings for six exchange-traded funds and one blank-cheque company. It also had one listing on its secondary market, which connects investors with smaller privately owned businesses.

Abu Dhabi National Oil Company’s gas business and Abu Dhabi-headquartered supermarket chain Lulu Group International are among those planning listings this year.

The Gulf region became a bright spot for public share sales last year, boosted by high oil prices and government-led privatization programs.

Gulf issuers raised about $16 billion from IPOs last year, accounting for about half of total IPO proceeds from Europe, the Middle East and Africa, Refinitiv data shows.

The ADX, with a market capitalization of about $714 billion, registered a 20 percent gain for its equities index last year, outperforming global markets.

“I don’t think we can separate capital markets from the overall economic story for the region, which has benefited from higher oil prices,” Malak said.

Multiple social and economic reforms have also improved the business environment and had a positive knock-on effect on the economy and markets, he added.

The ADX is working on expanding partnerships with other exchanges and increasing its institutional investor base, which swelled by 12 percent last year with participants from the top 25 global asset management firms.

A $1.4 billion IPO fund launched by the emirate to attract companies to list is also helping the exchange to grow, Malak said.

“We’ve seen opportunities in various sectors, including tech, and we’re working with them and helping them structure their business to be ready for an IPO if they choose.”