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Axiom IPO u-turn.

The scrapping of the long-touted Nasdaq Dubai listing of UAE mobile phone retailer Axiom is a serious road block for the revival of the country's lagging capital markets, experts have told 7DAYS. "It is a set back for a lot of companies. Whichever side of the fence you are sitting on this is a setback to signs of recovery.

Nobody should be happy that it has happened," said Mohammed Yasin, chief investment officer at CAPM Investment.

"I think that on the contrary, it is something that has again highlighted the low levels of confidence within the market."

Late on Monday, Axiom called off its long awaited share listing, an offering which would have been the first on a UAE exchange since the onset of the financial crisis in 2008. Many were hoping the initial public offering (IPO) would revive the UAE markets and help to stimulate trading volumes which have remained resolutely sluggish.

Faisal Al Bannai, founder and chief executive of Axiom, said that despite strong demand from international investors the IPO was stopped due to "concerns about market conditions and liquidity".

"We remain extremely confident in the strengths of Axiom's business, growth prospects and suitability as a public company and will be re-evaluating our options in the future," he concluded.

Axiom had set a share price range between $0.80 and $1.15 and said proceeds would have been used to repay some of $354 million worth of debt.

Yasin was not the only expert to express his concern yesterday over the IPO backtrack.

Karim Khadr, head of research at Alembic HC told 7DAYS that it is a negative for the market. "It sends a message- In the UAE you need new paper and it will show the sign of confidence," said Khadr. "It would have been better for the UAE market - this is not going to restore confidence."

CAPM's Yasin further expressed the fear that the news will discourage other enterprises from listing on the UAE bourses: "Everybody is afraid. The position that Axiom is in today is a position that nobody wants to be in."

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Publication:7 Days (Dubai, United Arab Emirates)
Date:Dec 8, 2010
Words:361
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