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Salik shares climb 20% on debut

The listing underscores the significance of Dubai’s financial markets development strategy and the efficiency of its markets

Salik shares climbed 20 per cent above its listing price on its market debut on Thursday in a sign that investors still have an appetite for local flotations despite struggling global markets.

The shares of the Dubai-based toll-road operator, which are traded within the transportation sector, rose to Dh2.41 in early trading on the Dubai Financial Market (DFM), giving it a market value of about Dh17.3 billion ($4.7 billion). However, it closed 11 per cent up at Dh2.22 in a broadly negative market as the benchmark index finished the day 0.79 per cent down at 3,316.58 points.

The DFM applied no price limits on the shares during the first day of trading, as they will be applied from the second day of listing.

DFM welcome listing

"Salik's successful listing on the DFM is a clear demonstration of investor confidence in Dubai’s capital markets and its growth ambitions,” Mattar Al Tayer, chairman of Salik’s board of directors, said at the bell-ringing ceremony at the Dubai Financial Market on Thursday.

Mattar Al Tayer rang the DFM market opening bell to celebrate the listing in the presence of Helal Al Marri, chairman of the DFM; Ibrahim Sultan Al Haddad, chief executive officer of Salik; and Hamed Ali, CEO of the DFM and Nasdaq Dubai, as well as senior executives from both sides.

Al Tayer said Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and Deputy Prime Minister and Minister of Finance of the UAE, has a clear vision to double the size of the financial market and attract foreign investments, and Salik is further proof of the success of this vision.

"I would like to welcome our new shareholders who are embarking on this journey with us, which Salik started fifteen years ago, and today it has become one of the most important and leading brands that have played a pivotal role in managing traffic in Dubai," Al Tayer said.

Third listing on DFM in 2022

Salik raised Dh3.735 billion from its initial public offering, which was oversubscribed more than 49 times across all tranches with total gross demand at Dh184.2 billion. This is the third public offering and listing on the DFM in 2022 to date after Dewa and Tecom Group, as part of the accelerated steps to implement Dubai’s strategy to develop financial markets, which includes offering shares in 10 leading entities.

The company, which has 3.6 million vehicles registered on its system, began trading under the symbol 'Salik', culminating its successful public offering. The strong demand towards the issuance prompted the company to raise the offered shares to 1,867,500,000 shares representing 24.9 per cent of its share capital at a price of Dh2 instead of 20 per cent as initially planned. The offering was oversubscribed by 49 times as it has attracted orders with a total value of Dh184.2 billion, in a clear indication on the strong demand for Salik’s shares from various investor categories.

Muhammad Rasoul, chief executive officer of amana, said Salik is a good investment opportunity and it will help further strengthen capital markets of the UAE.

“Investing in Salik is also an opportunity to be part of Dubai’s future, and benefit from its growth. As the company has already announced to distribute 100 per cent of its profits among the shareholders, so it will be a good investment option,” Rasoul said.

Mohamed Fahmi, EFG Hermes’ co-head of Investment Banking, said the UAE continues to be an attractive investment hub despite a turbulent global economic backdrop.

“Offering a very attractive investment proposition at a time where investors are looking for quality issuances, this IPO marks Dubai’s resurgence as an important financial hub in the GCC and will hopefully sustain the positive momentum for further offerings on the DFM in 2022,” Fahmi said.

IPO supports Dubai strategy

Helal Al Marri, chairman of the DFM, said the listing of the shares of this unique company supports Dubai’s ambitious strategy to develop its financial markets, strengthening its leadership and boosting its prospects.

"Dubai has always been a regional leader in terms of offering stakes in government groups since 2006 beginning with the listing of DFM Company itself. Today’s listing is the third of its kind since April 2022, which underscores the commitment of the Supreme Committee for the Development of Financial Markets, led by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, to implement the strategy and achieve its objectives with the highest levels of efficiency and at the earliest possible timeframe as Dubai used to deliver,” he said.

Ibrahim Sultan Al Haddad, chief executive officer of Salik, said the overwhelming demand that we witnessed for the IPO is testament to Salik’s robust business model, as well as the fundamentals underpinning Dubai’s capital markets.

"We have full faith in Salik’s long-term principles and values, and we are fully committed to delivering great value over the long term to all our shareholders,” he said.

Strong impetus to the transportation sector

Hamed Ali, CEO of the DFM and Nasdaq Dubai, said Salik listing gives strong impetus to the transportation sector in the market and reinforces our constant efforts to diversify investment opportunities and attract companies that reflect the dynamism and growth of Dubai's economy.

"This listing is a key step in Dubai’s continuous and successful efforts to expand ownership base in numerous leading companies. It also offers DFM investors a proxy to participate in the notable growth of these companies, supported by the world-class business environment and the rapid economic growth in Dubai," he said.

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