The Intergovernmental Panel on Climate…
China’s reopening is set to…
ADNOC Distribution, the fuel retail unit of the UAE’s state oil firm ADNOC, made a strong debut on the Abu Dhabi Securities Exchange on Wednesday, opening 16 percent higher than the price set in the initial public offering (IPO).
Shares in ADNOC Distribution jumped to US$0.79 (2.90 dirhams) at the start of trade, compared to US$0.68 (2.50 dirhams) in the IPO price, and closed 6 percent higher at US$0.72 (2.65 dirhams).
ADNOC had set an IPO offer price for its fuel distribution unit valuing it at US$8.5 billion, well below the up-to-US$14 billion valuation the UAE’s state oil firm was targeting six months ago.
ADNOC Distribution will be the largest IPO on the Abu Dhabi Securities Exchange in over a decade, Sultan Ahmed Al Jaber, ADNOC Group CEO, said last week.
“It’s interesting for investors to own Adnoc Distribution because forecasts are indicating a rise in oil price, which can increase profit margins,” Issam Kassabieh, equities analyst at Menacorp Financial Services in Dubai, told Bloomberg, commenting on ADNOC Distribution’s market debut.
“Everybody is pleasantly surprised with the opening of the shares -- there was worry that the secondary market weakness could affect the opening day,” Mohammed Ali Yasin, chief executive officer at NBAD Securities, commented for Bloomberg.
Related: Cyberattacks: The Biggest Threat To OPEC
Analysts will be looking at ADNOC Distribution as a proxy for the oil price recovery amid underperforming stock markets in the Middle East due to rising geopolitical tensions.
“It’s been a long time coming,” John Carey, deputy CEO at ADNOC Distribution, told CNBC, commenting on the company’s listing. “For us, this is a long-term play, we have a great plan in place and therefore, going forward, we are really excited,” Carey said.
“This is the first time we’ve brought international investment in,” the manager said, commenting on the international demand in ADNOC Distribution’s IPO.
By Tsvetana Paraskova for OIlprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.