Crown Prince of Dubai His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum has launched the Nasdaq Dubai Growth Market, a new market under the umbrella of Nasdaq Dubai. The landmark initiative aims to help young businesses and small and medium-sized companies (SMEs) achieve the next phase of their expansion by raising capital through an initial public offering (IPO).
The step falls under the framework of the Dubai Future District initiatives, which was launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai as the largest specialized area in the region for creating the future economy by providing an investment, technical, legislative, service and incentive environment. The district links Emirates Towers with the Dubai World Trade Centre and the Dubai International Financial Centre.
The Nasdaq Dubai Growth Market will enable fast-growing companies to achieve a streamlined and cost-effective listing on the region’s international exchange. As part of the Dubai Future District project, the Growth Market will welcome not only companies in the UAE, but also list companies from around the world to help them expand in the region and internationally.
HH Sheikh Hamdan said that Dubai is keen to launch initiatives that will boost the economy locally, regionally or globally and stimulate growth across various sectors, while also creating an environment where businesses can prosper through forming partnerships and opportunities. The Nasdaq Dubai Growth Market will add further momentum to Dubai and the UAE’s established role as the Middle East’s hub for business and finance and will serve as an ideal incubator for innovative projects, Sheikh Hamdan noted. His Highness said:
“SMEs are a key engine of our national economy. The launch of the Nasdaq Dubai Growth Market is a strategic step that will support this vital sector by opening new horizons for its companies and providing them with investment resources to expand their business and enhance their attractiveness in global markets."
HH Sheikh Hamdan underlined the value of supporting small and medium-sized companies and its contribution to the overall economic development.
His Excellency Essa Kazim, Governor of Dubai International Financial Centre (DIFC) and Chairman of Dubai Financial Market (DFM), said:
“The launch of the Nasdaq Dubai Growth Market will be a milestone for the capital markets of Dubai and the region, by helping to expand the business activity and visibility of companies that choose to list on it wherever in the world they are based. The Growth Market is set to play a key role in the future of capital-raising and the channeling of investment to enterprising companies to enable them to succeed during all phases of the business cycle supported by their Dubai listing.”
Hamed Ali, Chief Executive of Nasdaq Dubai and Deputy Chief Executive of Dubai Financial Market, said:
“The Nasdaq Dubai Growth Market has been strategically designed to attract a wide range of companies across a variety of sectors and geographies, with a straightforward listing process to provide a seamless journey to going public. By creating attractive opportunities for investors on a platform regulated to international standards, the market will give companies first-class access to the capital that they deserve and fuel regional and global growth.”
His Excellency Helal Saeed Almarri, Director General, Dubai’s Department of Tourism and Commerce Marketing, and Director General of the Dubai World Trade Centre Authority, said: “The Nasdaq Dubai Growth Market is a significant development towards the success of Dubai Future District, launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minster of the UAE and Ruler of Dubai, underlining Dubai’s unwavering commitment to the region’s future economy. Affording innovation driven enterprises access to new capital and funding, this new market further enhances Dubai Future District’s integrated eco-system and business-growth infrastructure for new startups and SMEs to work, live and thrive in the heart of Dubai.”
Khalfan Belhoul, Chief Executive Officer of Dubai Future Foundation, said:
“The Nasdaq Dubai Growth Market will contribute to enhance creativity and innovative thinking and support entrepreneurs and emerging companies by providing the financing needed for innovative projects, to accelerate their growth and create new markets for their services and products. The launch of this market constitutes a new step that strengthens Dubai's leadership in supporting the innovation and entrepreneurship system and strengthens its position as one of the leading cities in the world in preparation for the future.”
The Nasdaq Dubai Growth Market allows SMEs to list their businesses if they are valued below 250 million US dollars. A minimum operating history of just one year is required, compared to three years for Nasdaq Dubai’s main market.
Nasdaq Dubai is collaborating with government bodies, UAE free zones and expert advisory companies as partners to launch the Growth Market. The advisors will include financial advisory firms, investment banks, law and accounting firms which will provide tailored support including pre-IPO awareness and readiness exercises.
Like Nasdaq Dubai’s main equity market, the Growth Market will allow owners of an enterprise to carry out their IPO while selling as little as 25% of the shares in their company, enabling them to keep control.
Nasdaq Dubai intends to launch the Growth Market in early 2021 in line with the first IPOs. A number of companies have already appointed advisors to begin the IPO process. The creation of the Growth Market has been facilitated by developments in the regulatory framework supporting the exchange announced in April 2020 by Dubai Financial Services Authority, following consultation with market participants.
Companies that are not ready for an IPO will be able to join the Private Market segment of the Growth Market. On the Private Market a company’s shares are held for safekeeping in Nasdaq Dubai’s Central Securities Depository (CSD). This is designed to give confidence to investors and moves the company into an exchange environment ahead of a potential listing.