Goldman Sachs gave equities a ringing endorsement, saying the asset class is poised to deliver better returns than bonds over the next few years. In Dubai, the financial markets are firmly on the rise since the beginning of 2012. DFM General Index rose over 20% only in February. Traditionally slower and more conservative Abu Dhabi Exchange General Index follows the trend.
Stocks are clearly on the rebound across the boards. Safe heavens’ luster is overshadowed by investors increasing appetite for risk. Gold is stumbling, although trading remains range bound. Analysts predict gold price drop during the second half of 2012. China-based bankers give fair value from $1200 to $1300 per ounce.
Howver, U.A.E. stocks would need an unambiguous acceleration in economic activity to strengthen further. Higher moves would require rise in real estate prices, bank strength, and fresh opportunities. Prospective IPOs should be more up to date with International trends and global demand. Innovative ideas from the global financial markets could inspire local based companies to take larger steps towards financing expansions.
Regional investors are hungry for “fresh blood” as suggested by the few oversubscribed IPO launched on ADX in 2011. Gulf-based sovereign wealth funds and investment holdings are heavily investing in tech and banking IPOs, mining and agriculture stocks oversees. Fresh and innovative IPO concepts may find rich turfs in U.A.E. frontier markets, also known as pretty liquid.
Currently, some unconfirmed talks suggest that Dubai-based GEMS Education may opt for an IPO listing. In Abu Dhabi, Manazel Real Estate renews investors’ interest tests for its IPO, which was firstly discussed back in 2008. Nevertheless, there are no technology or sport IPOs listed on DFM and ADX yet, although appetite for technology investments is tremendous. Perhaps, regional technology companies IPOs can revive local market players appetite.
Elsewhere, investors will soon have a chance to buy a piece of the Empire State Building, the art deco-style, 102-story skyscraper in Manhattan, New York. A realty trust controlling the tower and 11 other properties prepares to attempt a $1 billion IPO in the coming months. Named for the group’s iconic crown jewel, Empire State Realty Trust will list on the New York Stock Exchange and trade under the “ESB” ticker, according to its Securities and Exchange Commission fillings.
Formula One (F1), the top global motor racing series, is considering options for a stock market listing. According to media reports, Singapore is preferred location for the IPO float. A Singapore listing for F1 would potentially make it the second major sports brand to look at the wealthy Southeast Asian city-state after English Premier League soccer club Manchester United considered a $1 billion Singapore IPO late last year.