Dubai stock volumes dry up ahead of planned rush of listings

[DUBAI] Trading volumes on Dubai's bourse have dropped back to levels seen before the city announced a string of initiatives to bolster activity, including listing as many as 10 state-owned firms.

Volumes had picked up in the last 3 months of 2021, hitting a 4-year high in November, but have since faltered. The number of shares traded on the bourse, once the United Arab Emirates's leading exchange, have dropped in 4 out of the past 5 years.

Saudi Arabia and Abu Dhabi, which have led the way on new stock sales in the Gulf, continue to see the most trading activity in the region.

"Dubai trading volumes are going to go up sustainably only with more initial public offerings (IPO), greater free floats, and higher foreign ownership limits," said Hasnain Malik, a strategist at Tellimer in Dubai. "There is no silver bullet to ignite activity."

Dubai has seen just 1 new stock sale since 2017, and a string of delistings have dented investor confidence. The government is hoping to reverse that, and last week unveiled plans to list its main utility in what is shaping to be the city's biggest listing in 15 years.

The city missed out entirely on an IPO rush that swept the Middle East last year and saw offerings draw in tens of billions of dollars of demand. Investors are now hoping Dubai Electricity & Water Authority's debut will shake up activity on the bourse - books on the IPO were covered within hours of launching the deal. BLOOMBERG