DP World rises to 3-week high
By Tamara Walid |
March 8, 2010, Monday
|
Print Edition
Print Edition
DP World shares rose to a three-week high yesterday after a newspaper report said it may offer new shares to shareholders and troubled parent Dubai World could sell an additional stake.
The port operator, which has a market capitalization of about US$6.7 billion, is considering offering 5 percent of its shares in a rights issue, while its mother company could offer a 10 percent stake to the public, a move which could raise US$1 billion, The National reported.
Citing unidentified senior sources at the company, the report said DP World was aiming to become part of the FTSE 100 share index in a bid to boost liquidity and raise the stock's free float shares to 35 percent.
A DP World spokeswoman declined to comment.
"We believe the appetite for equity in the potential new listing is likely to be solid, given the emerging market exposure and excellent cash flow generation offered by the stock, partially offsetting its perceived Dubai risk premium," said Ian Munro, MAC Capital head of research, in a note to clients.
The company, whose shares currently trade on the Nasdaq Dubai market, could seek a secondary listing on the London Stock Exchange as soon as the second quarter of this year, it said in January.
Since listing on Nasdaq Dubai - formerly the Dubai International Finance Exchange - in November 2007, DP World's shares have struggled. The stock rose as much as 6.2 percent, but were up 4.96 percent at 42.5 US cents yesterday afternoon, down about 67 percent on its initial public offering price of US$1.30.
DP World is one of the largest port operators in the world and is 77 percent owned by Dubai government-linked conglomerate Dubai World, but is not included in its parent company's US$22 billion debt restructuring plans.
Dubai World rocked global markets last November when it asked for a delay on paying US$26 billion in debt.
The port operator, which has a market capitalization of about US$6.7 billion, is considering offering 5 percent of its shares in a rights issue, while its mother company could offer a 10 percent stake to the public, a move which could raise US$1 billion, The National reported.
Citing unidentified senior sources at the company, the report said DP World was aiming to become part of the FTSE 100 share index in a bid to boost liquidity and raise the stock's free float shares to 35 percent.
A DP World spokeswoman declined to comment.
"We believe the appetite for equity in the potential new listing is likely to be solid, given the emerging market exposure and excellent cash flow generation offered by the stock, partially offsetting its perceived Dubai risk premium," said Ian Munro, MAC Capital head of research, in a note to clients.
The company, whose shares currently trade on the Nasdaq Dubai market, could seek a secondary listing on the London Stock Exchange as soon as the second quarter of this year, it said in January.
Since listing on Nasdaq Dubai - formerly the Dubai International Finance Exchange - in November 2007, DP World's shares have struggled. The stock rose as much as 6.2 percent, but were up 4.96 percent at 42.5 US cents yesterday afternoon, down about 67 percent on its initial public offering price of US$1.30.
DP World is one of the largest port operators in the world and is 77 percent owned by Dubai government-linked conglomerate Dubai World, but is not included in its parent company's US$22 billion debt restructuring plans.
Dubai World rocked global markets last November when it asked for a delay on paying US$26 billion in debt.
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