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: Free Zones in the UAE |
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Dubai Ports World [DP World] |
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| DP World Rises on First Trading Day at Dubai Exchange (Update4) |
A container ship is unloaded at Southampton Container Terminal in Southampton, U.K., on July 17, 2007 |
DP World Ltd., the Dubai-controlled port operator that raised $4.96 billion in an initial offering, advanced on its first day of trading after the company said shipping demand is growing at all of its terminals.
DP World stock climbed 6 cents, or 4.6 percent, to $1.36 on the
Dubai International Financial Exchange as more than 303 million shares were traded. The port operator sold 3.818 billion shares, or 23 percent of its equity, for $1.30 apiece in an initial public offering for which there were 15 times more bids than shares on offer.
The IPO, the biggest share sale in the Middle East, is Dubai's biggest step in establishing itself as a global financial center and will help spur interest in the sheikdom's two-year-old stock exchange as the government sells assets to lure investors. DP World, which started 35 years ago with a single port, bought Peninsular & Oriental Steam Navigation Co. last year for $6.8 billion and now has 42 terminals in 22 countries.
"Our biggest issue is keeping up with demand,'' DP World Chairman Sultan Bin Sulayem said in an interview after the listing in Dubai today. "Every single port we are running, we are trying to meet that demand, and in all our ports we have organic expansion.''
DP World has a pipeline of new projects that will almost double capacity in 10 years as it seeks to catch up with Hong Kong's Hutchison Port Holdings Ltd., Singapore's PSA International Pte. and A.P. Moeller-Maersk of Denmark.
Investor Appetite
"There is a lot of overseas investor appetite to hold DP World shares,'' said Kamran Butt, head of Middle East equity research at Credit Suisse Group. "Being 15 times oversubscribed, there are a lot of investors who didn't get a portion of the stock.''
DP World is evaluating ways to manage U.S. ports again after being forced to sell assets there under pressure from lawmakers, Chief Executive Officer Mohammed Sharaf told reporters after the listing, without providing details.
DP World gained six U.S. port terminals in 2006 when it bought London-based P&O. It sold them to American International Group Inc. in March, appeasing U.S. lawmakers who said Dubai's ownership would jeopardize national security.
The company's port network will help it tap global trade volumes that the International Monetary Fund says will grow 6.6 percent this year, driven by demand for low-cost Asian goods in Europe and the U.S.
Global Reach
DP World's ports span five continents and the company does not see the possibility of a U.S. recession "affecting our business,'' bin
Sulayem said in the interview. The company is building 13 new ports in 13 countries and expanding 10 more, spokeswoman Sarah Lockie told reporters.
"The business that we are in, shipping, is experiencing a golden era,'' the chairman said.
A global economic slowdown is a "key risk'' facing DP World, Deutsche Bank AG, one of four sale managers for the port operator's IPO, said in an Oct. 21 research report.
The number of economists forecasting a U.S. recession almost doubled in the past two months, according to a survey by the National Association for Business Economics. The housing slump, a collapse of the mortgage-bond market and higher energy prices will cause economic growth to slow to a 1.5 percent annual pace this quarter, less than the survey participants previously forecast.
DP World's profit is expected to rise at a compound annual rate of about 34 percent between 2006 and 2011, Deutsche Bank said in the research report. Earnings may advance 33 percent in 2008 to $467 million from $351 million in 2007 and climb 37 percent in 2009 to $641 million, the report said.
Anchor Listing
DP World is the Dubai exchange's "first anchor listing'' and "there are more to come,'' Chief Executive Officer Per E. Larsson said today. Created in 2005 as the Persian Gulf's first bourse open to investors and issuers of any nationality, it currently trades stocks of 13 companies.
Dubai is aiming to benefit from the Gulf's oil-fuelled economic boom to help it plug a trading gap between London and Singapore. The emirate has bought stakes in Nasdaq Stock Market Inc. and London Stock Exchange Group Ltd. as it vies with Qatar and Bahrain to be the region's dominant financial center. It also has holdings in international banks including HSBC Holdings Plc, Deutsche Bank AG and Standard Chartered Plc.
Money raised from DP World's IPO will repay $3.5 billion of Islamic bonds the company raised last year and provide cash to the government. About a quarter of shares sold were allotted to Islamic bond, or sukuk, holders. About 10 percent of the remaining shares were sold to individual investors, 33 percent to European investors, 23 percent to U.S. corporates and the remaining to Middle Eastern institutions. Small investors received at least 3,500 shares each. |
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Courtesy Bloomberg L. P.
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Hot
properties in UAE - Freehold |
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