84% of UAE Investors Likely to Invest in Future Offerings, Reveals Edelman Smithfield’s UAE Investor Pulse Survey

The latest findings from Edelman Smithfield's survey, which show a remarkable investor interest in UAE IPO offerings. An impressive 84% of UAE investors are ready to invest in future IPOs, surpassing their investment levels from 2022 and 2023.

Market Structure: 67% of respondents believe that having two distinct exchanges benefits UAE capital markets.
Confidence in Processes: Nearly three-quarters of investors trust the UAE's bookbuilding processes and find new listings fairly valued
Sector Focus: Real estate, tech, and healthcare are the top sectors of interest for IPO investments.
Evaluation Metrics: Profitability is the top metric for evaluating IPOs, followed by a strong balance sheet and brand awareness.
Investment Considerations: 67% of investors take the use of proceeds into account, while 82% prioritize quality earnings when evaluating IPO opportunities.

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What this means

Appetite for IPOs Remains Strong

Investors are looking to continue investing in UAE IPOs given the strong pipeline UAE capital markets provide a distinct advantage given the presence of two stock exchanges (ADX and DFM) presenting increased investment opportunity Investors believe newly listed firms are fairly valued, and have shown confidence in the bookbuilding process.

Investment Thesis Communication a Must

The majority of investors pinpointed that solid IPO communications is key to attain investment. Roadshow videos a key tool for encouraging investment.

Growth Strategy, Quality Earnings, and Guidance are Key

Investors eyeing new issuers with organic growth investment plans as the main pillar for their use of proceeds. Investors targeting firms with strong FCF and lower leverage. There is a clear push for increased clarity and availability of medium-term guidance on a quarterly basis.

Board Experience and Diversity Matters

Board diversity remains top of mind for investors; priority goes to boards that boast experience in cybersecurity and ESG. Boards comprised of members with established history in overseeing publicly listed entities is key for investors.