The Middle Eastern division of German food delivery giant Delivery Hero SE is set to initiate trading in Dubai next week, highlighting a remarkable transformation for the city’s stock market over recent years.
Talabat’s initial public offering, estimated at $2 billion, represents the largest IPO in the Middle East this year and ranks as the most significant technology listing worldwide. This may lead to a renewed interest in private listings within the emirate.
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“Talabat is definitely not going to be a standalone case,” remarked Prasad Chari, head of equity capital markets at Emirates NBD, the bank pivotal to the IPO’s success. He noted that they are currently in “active discussions” with several issuers and sponsors internationally, exploring opportunities for listings on Dubai’s stock exchange.
Since the city launched its IPO initiative in late 2021, Emirates NBD has emerged as a leading adviser for new share offerings in Dubai. The government’s privatization efforts have amassed over $8 billion, significantly enhancing the total market capitalization of publicly traded companies.
Alongside a similar surge in activity in nearby Abu Dhabi, the United Arab Emirates is expected to be the most vibrant venue for listings across the Europe, Middle East, and Africa region for the third consecutive year, as indicated by Bloomberg’s compiled data.
This marks a notable shift for Dubai in comparison to just a few years ago.
In 2021, the market experienced a sharp decline in new share offerings, compounded by a series of delistings that eroded investor confidence. During this period, Abu Dhabi and Riyadh began to take advantage of their privatization strategies, attracting billions and positioning the region as a prime hub for IPOs.
Dubai’s fortunes began to improve in November that year when the deputy ruler announced intentions to float 10 state-owned entities. At the same time, the stock exchange underwent a significant overhaul, alongside a range of initiatives aimed at encouraging private firms to go public.
These actions have coincided with a post-pandemic rebound in Dubai’s economy, driven by the World Expo and eased travel restrictions, which rejuvenated the tourism sector. Additionally, a surge in expatriates from around the world has aided this recovery.
Talabat’s market introduction will be closely monitored by various other companies, including the operator of the classifieds platform Dubizzle, the owner of the Al Fakher shisha brand, and hotel operator FIVE Holdings, all of which are considering share offerings.
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This launch could act as a barometer for government-owned enterprises preparing for their own public listings.
A few years following a series of real estate delistings due to a declining property market, the government aims to capitalize on the current recovery — with Dubai Holding exploring the consolidation of two property portfolios into real estate investment trusts for potential listing, according to Bloomberg News.
Following the IPO trend, additional sell-offs are also predicted, as expressed by Chari’s comments, which would further improve liquidity in the market.
At the same time, the benchmark Dubai Financial Market General Index has experienced a nearly 20% increase this year, significantly outperforming its peers in Abu Dhabi and Saudi Arabia.
However, as Dubai stocks remain close to their highest levels since 2014, this also leads to elevated price valuations. Analysts have cautioned that the index may be “more vulnerable to negative changes than to additional positive developments.”
“A significant risk for Dubai’s economy is a slowdown in global growth, which could reduce demand for key sectors dependent on external markets,” observed Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Nonetheless, ongoing investment strategies should help sustain the economy, and Dubai’s fiscal situation has substantially improved.”
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