Dubai stocks gains, lifted by Dewa’s expected IPO

The Dubai Financial Market (DFM) closed 0.8 per cent higher on Wednesday, lifted by the news of Dubai Electricity and Water Authority (Dewa) expected initial public offering (IPO) early next month.

In addition, investors also priced in geopolitical developments in Europe on a volatile trading day, waiting to see how the Ukraine-Russian crisis pans out.

Quoting sources, newswires reported that Dewa intends to float between five to 10 per cent stake on the Dubai Financial Market on March 7 valued between $27 billion to $37 billion.

Vijay Valecha, chief investment officer at Century Financial, said the utility services provider is considering tripling its annual dividend target to Dh6.2 billion. The expected dividend yield could vary between 4.56 per cent and 6.25 per cent.

“Moreover, Dewa expects revenue growth of 12 to 12.5 per cent this year, helped by growth at its Empower unit and “material” independent power producer capacity additions. The outlook on earnings remains positive, as the firm expects consolidated EBITDA margin to reach about 56 per cent in 2023. Capital expenditure in the five-year period to 2026 is expected to be about Dh40 billion, including about Dh15 billion in 2022 and Dh10 billion in 2023,” added Valecha.

— waheedabbas@khaleejtimes.com