Dubai launches new stock market for SMEs

Dubai has launched a new market – the Nasdaq Dubai Growth Market – to help young businesses and SMEs raise capital via an IPO.

The new market, managed by Nasdaq Dubai, will be operational by early 2021. Launched by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, the Nasdaq Dubai Growth Market allows SMEs to list their businesses if they are valued below $250m.

They require to demonstrate a minimum operating history of one year, compared to three years for Nasdaq Dubai’s main market.

Like Nasdaq Dubai’s main equity market, the Growth Market will allow owners to carry out their IPO, while selling as little as 25 per cent of the shares in their company, enabling them to keep greater control over their firms.

Today, we launched the @NasdaqDubai Growth Market to support young businesses & SMEs – one of the pillars of our economy. Dubai seeks to open new opportunities for entrepreneurs, to help them expand, attract investors & finance their projects. pic.twitter.com/0jHmciBEQD

— Hamdan bin Mohammed (@HamdanMohammed) October 27, 2020

Nasdaq Dubai is collaborating with government bodies, UAE free zones, financial advisory firms, investment banks, law and accounting firms to develop this new exchange. Several companies have already been appointed advisors to begin the IPO process.

Companies that are not yet ready for an IPO on this market will be able to join the Private Market segment of the Growth Market, WAM reported.

On the Private Market, a company’s shares are held for safekeeping in Nasdaq Dubai’s Central Securities Depository. This measure is designed to inspire confidence among investors and shifts it into an exchange environment ahead of a potential listing.

The Growth Market will not be restricted to only companies in the UAE, but will be open to international companies as well.

“UN statistics indicate that SMEs generate 7 out of 10 jobs in emerging markets, while the world needs 600 million additional jobs by 2030 to absorb new entrants to the labour market. It is our aim to help these young businesses secure necessary financing to grow their workforce,” tweeted Sheikh Hamdan.

“Dubai seeks to open new opportunities for entrepreneurs, to help them expand, attract investors and finance their projects,” added Sheikh Hamdan.

“The Nasdaq Growth Market will begin operations in early 2021, reinforcing the UAE and Dubai’s established role as the Mideast’s business and finance hub, while allowing businesses to discover new opportunities that can drive the local, regional and global economy forward.”

The new Growth Market is part of the Future District announced in January this year, which involves linking the Dubai World Trade Centre (DWTC), Emirates Towers and Dubai International Financial Centre (DIFC) to support ‘new economy’ companies.

Read: New ‘Future District’ created in Dubai, Dhs1bn fund launched for ‘new economy’ firms