Stock News: Emaar Malls IPO May Temporarily Take Away More Money From Dubai

Dubai’s bourse may remain soft on Wednesday as retail investors temporarily take money from the market in order to participate in the initial public offer of Emaar Malls Group (EMG), while Saudi Arabia and Egypt look more positive.

The Dubai index fell 0.7 per cent on Tuesday because of selling by retail investors and closed very near its intra-day low of 4,977 points, indicating that selling pressure may persist.

That followed an announcement by Emaar Properties, Dubai’s largest developer, that institutional investors had fully subscribed to their tranche of the $1.58 billion IPO of EMG. The announcement appeared to prompt retail investors to submit more share purchase applications for their own tranche.

Emaar aims to sell about 30 per cent of the offered stock to retail investors. Some of them are now worried that since allocations will be made on a pro rata basis, they will not get nearly as many EMG shares as they want unless they submit large quantities of orders.

Elsewhere in the region, markets in Egypt and Saudi Arabia look bullish after coming out of profit-taking bouts.

The Cairo index added 0.9 per cent to 9,534 points in the last session. It faces resistance at 9,749 points, its early September high.

Saudi Arabia’s benchmark rose 0.6 per cent to 10,993 points on Tuesday and faces chart resistance at 11,160 points, the level at which it peaked last week.

On global markets, Asian shares were tentatively higher on Wednesday morning after Wall Street rebounded on speculation that the Federal Reserve would maintain its pledge of low interest rates.