A new survey by Edelman Smithfield has revealed that 84 percent of UAE investors are likely to invest in future initial public offerings (IPOs), highlighting a robust confidence in the region’s capital markets.
Investor Sentiment and Trust
The UAE Investor Pulse Survey 2024 provides insights into investor sentiment regarding the country’s capital markets:
- Valuation Confidence: 73 percent of investors believe that firms which have undergone IPOs in the past three years are fairly valued.
- Book-Building Process: 71 percent of investors trust the book-building process, a critical component of IPOs.
Simon Hailes, Managing Director and Head of Middle East at Edelman Smithfield, emphasized the importance of these findings: “Our Investor Pulse Survey provides valuable insights into investor sentiments and expectations regarding the region’s capital markets. It’s encouraging to witness the growing investor confidence in the UAE markets and their strong appetite for UAE IPOs.”
Key Findings
The survey highlighted several key findings regarding investor priorities:
- Transparent Communication: 65 percent of investors prioritize transparent IPO communications for making informed decisions.
- Use of Proceeds: 67 percent of investors consider the use of proceeds when evaluating potential IPO investments.
- Quality Earnings: 82 percent of investors emphasize the importance of quality earnings in evaluating investment opportunities.
- Growth Plans: 71 percent of investors prefer new issuers with organic growth investment plans.
Sector Interests
When it comes to sectors of interest, the survey revealed the following preferences:
- Real Estate: 51 percent
- Technology: 41 percent
- Healthcare: 33 percent
UAE’s Contribution to GCC IPO Proceeds
The UAE contributed approximately 58 percent of 2023 IPO proceeds in the GCC, underscoring its significant role in the region’s capital markets.
Hailes added: “To maintain this IPO momentum, it’s crucial for potential and existing issuers to prioritize transparent and consistent communication efforts. Our survey findings validate this, revealing that two-thirds of investors expect transparency and effective IPO communication from issuers to make informed decisions.”
Conclusion
The UAE Investor Pulse Survey 2024 demonstrates a strong investor confidence in the UAE’s capital markets and highlights the importance of transparent communication and quality earnings for successful IPOs. As the market continues to grow, the insights from this survey will be crucial for both investors and issuers aiming to navigate the evolving landscape of IPOs in the UAE.
