UAE exchange Al Ansari Financial Services shares surge in trading debut

DUBAI, United Arab Emirates — Al Ansari Financial Services made its trading debut on the Dubai Financial Market Thursday. Shares surged over 17% for the family-owned remittances and money exchange firm, which marks the first IPO for Dubai this year.

The Al Ansari family sold 750 million shares in the offering, which is equal to a 10% stake in the company.

 Al Ansari Financial Services’ Group CEO Rashed Ali Al Ansari told CNBC’s Dan Murphy the sheer size of the organization pushed the company to decide to list publicly.

“We were extremely pleased that there was a great acceptance from the market, this shows they very much trust in the growth story of the company,” he said.

The share sale, which raised up to $210 million, is one of the first for a family-owned firm in the United Arab Emirates. That figure puts the company’s valuation at $2.1 billion.

Family businesses make up 90% of private companies in the UAE, and going public is a big part of the government’s push to diversify the economy and attract international investment. In 2021, Dubai announced a listing of 10 state entities which aims to double the size of the Emirate’s capital market to $817 billion. 

The Dubai International Financial Centre (DIFC) area of Dubai, United Arab Emirates, with the Burj Khalifa in the backdrop, Sept. 16, 2022.

Christopher Pike | Bloomberg | Getty Images

The Al Ansari Financial Services IPO follows two massive Abu Dhabi listings. The first, Adnoc Gas, raised $2.5 billion and was the biggest share sale this year. There are at least eight more companies in line to list in the UAE capital alone, putting Abu Dhabi in first place in the Gulf’s IPO push. 

Despite pressure on the global banking sector, rising inflation and an aggressive rate hike cycle from central banks, Al Ansari says the exchange has hedged these risks in pricing its shares.

“We made sure that we priced it right, given the market conditions, and the pressures that international economies are going through. We were very concerned in the beginning when we saw the pressures, when we saw the Fed increasing rates, we have to compete with that,” he said. 

Remittances market

The 55-year-old company credits its success to its transactions in physical exchanges rather than Al Ansari’s online application.

Al Ansari Financial Services processes 126,000 transactions per day and has a 3 million-strong customer base, many of whom are low-income earners sending money home to remittance-dependent markets.

The United Arab Emirates is the world’s second-largest ‘send’ market, behind only the United States, and saw $47 billion in outflows in 2022, according to the World Bank. This is down to many foreign workers living in the UAE and sending money to their home countries, predominantly Pakistan, India and the Philippines. 

Al Ansari stressed to CNBC the resilience of the remittance industry, seen in 2008 and during the pandemic, throughout which Al Ansari said the company didn’t stop operations.

“Remittance is an essential service that we’re providing to the public here,” he said. “It’s very resilient, unlike the foreign currency business, where it’s dependent on tourism.”

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