DP World IPO - Dubai Ports World IPO

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Dubai Ports World Initial Public Offering (DPW IPO)

Page Contents (print-friendly page)
DP World introduction and background DP World IPO brokers
Latest DP World discussion topics and news DP World IPO receiving banks
DP World IPO information & prospectus Will I make money from the DP World IPO?
How to apply for the DP World IPO DP World convertible bond holders
Eligibility for the DP World IPO Other UAE IPOs
Subscriptions & allotments for the DPW IPO DP World IPO glossary
Important dates for the DP World IPO More questions about the DP World IPO?

26 November 2007 - DPW listed today. Close price was $1.36 (AED 4.99), +4.6% from IPO price, with solid trading volumes of 303 million shares worth $420 million (AED 1.54 billion). Our DIFX ticker may supply live data but is erratic at present. DP World opening price topic has charts and updates from the first day of trading. Intra-day chart for first day is below.

DP World shares trading chart

25 November 2007 - Some Deutsche Bank, Merrill Lynch, Rasmalla clients miss out on DPW IPO shares. DPW shares list on the DIFX 26 November 2007.

23 November 2007 - final DPW share allotment appears to be 3500 shares plus approximately 4.8% of remaining application amount (but with large reported variations). Applicants paying by direct transfer have had refunds credited to their accounts.

21 November 2007 - DP World IPO final offer price announced as $1.30 and shares 15x oversubscribed. Retail investors will get 3500 shares plus a pro rata amount. Refund checks should be in the mail by Sunday 25 November 2007.

11 November 2007 - DP World shares information added (with summary of DP World history)

Dubai Ports World IPO introduction and background

On 21 October 2007, after months of speculation, the Dubai Ports World Initial Public Offering (DP World IPO or DPW IPO) was announced, with the IPO period from 04-15 November 2007, and DP World (DPW) listing on the Dubai International Financial Exchange (DIFX) on 26 November 2007.

The IPO is for 17% of DP World (2.882 billion shares) priced at $1.00-$1.30 per share, with an additional 3% (498 million shares) available as an over-allotment (greenshoe) allowance. Subscription eligibility is restricted to residents of the UAE (both Emirati and expat), and GCC nationals resident in a GCC country.

DP World is a subsidiary of Ports & Free Zone World, which is itself a subsidiary of the Dubai Government owned Dubai World. The total value of the DP World IPO will be $2.88 to $4.39 billion depending on the final share price and how many shares are issued. This makes it by far the largest IPO in the UAE, and possibly the largest in the Middle East. Previously, the largest IPO in the UAE was the AED 3.2 billion ($0.87 billion) Deyaar IPO in May 2007, at about a quarter of the size of the DP World IPO. The largest IPO in the region was AED 15 billion ($4.1 billion) raised by Saudi Telecom in 2003.

DP World IPO latest news and links

Dubai Ports World forum - IPO and other related discussion at the UAE stocks forum

DPWorld IPO information (04 November 2007)
Total shares outstanding 16.6 billion
Total shares offered 2.822 billion (17%)
Over-allotment option 498 million shares (3%)
DIFX listing date 26 November 2007
DIFX ticker symbol DPW
Price range for IPO $1.00 - $1.30 per share
Nominal Value $0.10 per share
Dividend Policy (not guaranteed) at least 20% of net profit
DP World IPO prospectus (466 pages, PDF) download (within the UAE)
DP World IPO prospectus - DST topic more download links
DP World sample application form (2 pages, PDF) download (in the UAE)
How do I apply for the DP World IPO?
  • Check you are eligible to apply (see below).
  • Open an account with one of the DIFX brokers for the DP World IPO. Some will require you to have a bank account with them or a related bank. Trading accounts are in $ or AED (dirhams), not all brokers offer both.
  • Get a DP World IPO subscription form after 04 November 2007 from a broker or one of the receiving banks.
  • Fill in the form, return it to the broker or receiving bank with your money, and wait.
DP World IPO eligibility
  • UAE residents of any nationality (valid residence visa required).
  • UAE and GCC nationals resident in a GCC country.
  • International institutions "organised" under UAE or GCC laws.

Subscribers to the DP World IPO need to be at least 21 years old, and apply in person or through an authorised representative in the UAE (one of the brokers or receiving banks).

DP World IPO subcription application amounts
  • Minimum amount is $6000 or AED 20,000 depending on currency used for payment.
  • Increments of $2,000 or AED 5,000.
  • Application fee of 0.5% of the application amount.

If the DP World IPO is oversubscribed, there is a minimum allotment amount of $2000 worth of shares per applicant, with the remainder being divided up pro-rata. It is unknown how likely it is that the IPO will be oversubscribed, or by how much if it is, since this is the first IPO in the UAE of this nature. Previous UAE IPOs have been listed on one of the local markets and were heavily oversubscribed due in part to the IPO price being fixed at par value of 1 dirham per share, often undervaluing the company.

Dubai Ports World IPO Important Dates
Date Event
21 October 2007 Announcement of Initial Public Offering (IPO)
04 November 2007 Start of UAE retail IPO application period. DP World IPO Prospectus available on DPW IPO website (www.uae-ipo.com), application forms and documents available from brokers and receiving banks.
15 November 2007 End of UAE retail IPO application period.
21 November 2007 Pricing of DP World shares for IPO
22 November 2007 DPW IPO allotment confirmation send to subscribers by SMS
25 November 2007 Refund checks and allotment letters sent to subscribers
26 November 2007 DP World shares listing date on the DIFX, and start of trading in DPW shares.
Broker list for DP World IPO
Broker Telephone Notes
Al Dhabi Brokerage LLC 800-3325  
Daman Securities LLC 800-426325  
Direct Broker for Financial Services
800-3237 Also called Mubasher or MubasherTrade
EFG Hermes UAE Limited +971-4-3069333  
Emirates International Securities +971-4-3160260  
Emirates Securities +971-4-6271515  
First Gulf Financial Services 800-3437  
Mashreq Securities +971-4-3632222 Need US$ account, tel orders only for trading.
Rasmala Financial Brokerage +971-4-3098870  
Receiving banks for DPW IPO
Bank Telephone Notes
Mashreq Bank +971-4-2211120 19 branches Abu Dhabi, Ajman, Al Ain, Dhaid, Dibba, Dubai, Fujairah, Ras Al Khaimah, Sharjah, Umm Al Quwain
Abu Dhabi Commercial Bank +971-2-6275500 12 branches Abu Dhabi, Ajman, Al Ain, Dubai, Fujairah, Ras Al Khaimah, Sharjah
Emirates Bank +971-4-3160316 20 branches Abu Dhabi, Al Ain, Dubai, Fujairah, Ras Al Khaimah, Sharjah
First Gulf Bank +971-2-6816666 13 branches Abu Dhabi, Ajman, Al Ain, Dubai, Fujairah, Mussafah, Ras Al Khaimah, Sharjah
Will I make money if I buy DP World IPO shares?

Well, the short answer is that if we knew that, we wouldn't be working for a living!

In the short term, possibly, given that all IPOs in the UAE so far have floated (first listed on a stockmarket) at a price greater than the IPO price, sometimes by a factor of several times. And the excitement generated by a number of firsts for the DP World IPO could see sufficient demand to move the price up as soon as it launches. Scroll down to see a table of recent UAE IPOs, listing prices and returns.

In the medium term (months to a couple of years) it's difficult to say as this depends more on being able to assess the value of the company and its earnings. Some earnings figures are available in the DP World prospectus, and estimates from other sources. So far, at a price of $1.00 to $1.30, the shares don't look like a bargain but this comment is based on limited information. See the DP World financial analysis topic for more comments, and the DP World 2007 H1 summary report. It seems unlikely that DP World would price their shares at such a level as to be unappealing to the large number of investors keenly interested buying into one of Dubai's successful companies.

In the long-term (more than 5 years), shares of profitable companies rise in value. The US and UK sharemarkets have increased by about 10-12% per year on average over the past century. DP World is a solid company operating in a business sector that is not going to disappear, barring any serious unusual or unforseen events, for example an ice age, meteor strike, or the availability of teleportation. Hence DP World will grow and be profitable so it would be reasonable to expect their shares to rise from the issue price at a greater rate than receiving a couple of percent on your bank deposit.

What about the DP World convertible bond holders?

The terms of the original Dubai Ports World convertible bond say that bondholders are guaranteed 30% of the value of their stake as a share allotment in the DP World IPO.

Previous IPOs in the UAE

UAE IPOs (all with IPO price of AED 1 dh, and listed on the DFM) listing in 2007 so far, close price on the first day of listing, and percentage changes from par value:

Company Listing Date Float Price (AED) change 22 Oct 2007 change
Air Arabia (IPO) 17 Jul 2007 1.11 11% 1.67 67%
Deyaar (IPO) 05 Sep 2007 1.91 91% 1.99 99%
Dubai Financial Market (IPO) 07 Mar 2007 2.35 135% 4.09 309%
Gulf Navigation (IPO) 07 Feb 2007 1.29 29% 1.37 37%

Note that DP World IPO shares will not be priced at 1 dh each, the price will be determined by the market, so you would expect the price to be indicative of a fair value for DP World. The impressive looking increases for stocks in the above table are deceptive. Oversubscription rates were so high for DFM shares (300x), for example, that even at the float price of 2.35, many investors lost money by the time they repaid loans they had taken out to leverage their IPO investment.

What do all those words and acronyms mean?
  • ADSM - Abu Dhabi Securities Market - one of three UAE stockmarkets.
  • DFM - Dubai Financial Market - one of the three UAE stockmarkets.
  • DIFC - Dubai International Financial Center - a free zone in Dubai where financial organisations are based, including the DIFX.
  • DIFX - Dubai International Financial Exchange - one of three UAE stockmarkets, different from the other two in that it is intended to be a stock market for international companies. Also operates in a different regulatory environment and lists shares in US$ rather than UAE dirhams.
  • DFSA - Dubai Financial Services Authority - the regulatory body for the DIFC and the DIFX.
  • DPW - Dubai Ports World, more often referred to as DP World.
  • GCC - Gulf Cooperation Council. The following Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates.
  • IPO - initial public offering. The first time a company offers shares to the public. These are "new" shares. Owners of "new" shares can then sell them at a stock market to other people. So buying shares on the markets is like buying "second-hand" shares. A stock market is not necessary to trade shares but it makes it much easier - can you imagine trying to buy or sell shares through the Gulf News classifieds?
Any other questions about the DP World IPO?

Join the Dubai stock forum and ask in there - see the DP World section. Good luck!


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This page last updated 26-Nov-2007. E & OE.