Dubai's DP World plans to list in London next week
DUBAI, United Arab Emirates (AP) — DP World, the port operator controlled by the Gulf emirate of Dubai, laid out plans Wednesday to list its shares on the London Stock Exchange beginning next week.
The cargo handler hopes to attract a wider range of shareholders with the secondary listing, which will be a key test of investor appetite for Dubai government-linked investments. It already trades on the Nasdaq Dubai and will continue to do so once its shares start changing hands in London on June 1.
"This is the next natural step in the evolution of DP World, as the company has developed into a global leader," Chairman Sultan Ahmed bin Sulayem told reporters.
DP World, though a subsidiary of troubled state conglomerate Dubai World, is considered to be one of the city-state's more profitable and well-run companies.
It is the world's third-largest port operator, with operations at 49 cargo terminals on six continents, including the Middle East's busiest port in Dubai. It is primarily focused on fast-growing markets in the developing world.
Dubai World has released only a fifth of DP World shares on the open market. Executives say they have no plans to float a bigger stake despite the larger pool of potential investors.
"We are not releasing any shares ... so we are not expecting a dramatic change in DP World's share price in London. It's important people understand this," bin Sulayem said.
DP World cut spending during the economic downturn and is now benefiting from the rebounding global economy. Its earnings jumped 22 percent last year to $451.1 million.
John Sfakianakis, the chief economist at Banque Saudi Fransi-Credit Agricole Group in Riyadh, said the secondary listing could help attract big international investors that might otherwise shy away from smaller markets like Dubai.
"By placing it in London., you're widening the (shareholder) base, especially for institutional investors," he said.
Sfakianakis said shares are unlikely to enjoy a big bounce just because they are listed in a major financial center.
"It's more of a gradual process, rather than an expectation that the share price is going to be suddenly lifted," he said.