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UAE's Rasmala eyes up to $300 mln IPO in 2006
DUBAI, Aug 31 (Reuters) - Dubai-based Investment bank Rasmala Investments is considering a flotation worth up to $300 million in 2006 as high oil prices fuel a Gulf Arab stock market boom, its CEO said on Wednesday.
Ali al-Shihabi told journalists the investment banking and asset management firm would use the money to buy stakes in listed and private Arab firms.
Rasmala would then try to develop those companies with public offerings, mergers and acquisitions, and restructuring, he said.
Shihabi said Rasmala could seek to raise between $100 million and $300 million, but the decision would depend on market conditions in the energy-rich United Arab Emirates at the time.
"At current market levels, with valuations at around 40 times earnings, raising money is cheap. But we will have to see if that is still the case then," he said.
The main Dubai stock market index has risen 143 percent this year, while the sister index in Abu Dhabi is up 71 percent, fuelling a wave of IPOs and rights issues. Bankers estimate firms will raise a total of some 40 billion dirhams ($10.9 billion) on UAE capital markets in 2005.
But a number of analysts, including Shihabi, have warned that UAE and other Arab stock markets appear overvalued and may be set for a correction.
Rasmala would look to sell a minority stake of between 20 and 49 percent. Current UAE listing rules require firms to sell a minimum 55 percent stake in an IPO, but economy minister Sheikha Lubna al-Qassimi has pledged to remove this restriction by the end of this year.
Shihabi said Rasmala might seek a listing on one of the UAE's existing bourses in Dubai or Abu Dhabi, or on Dubai International Financial Exchange (DIFX), a third bourse due to launch on September 26 that promises regulation on a par with markets in London, New York and Hong Kong.
The firm's parent, Rasmala Investment Holdings, founded in 1999, is registered in Bermuda but is switching its registration to Dubai International Financial Centre, a government-backed finance district launched in 2004 that will include DIFX.
Rasmala's shareholders include: Deutsche Bank (DBKGn.DE: Quote, Profile, Research), which holds 15 percent; the crown prince of Ras Al-Khaimah, one of seven emirates that make up the UAE, who holds 20 percent; Rasmala managers, who hold 15 percent; private and institutional investors from Saudi Arabia, who hold the rest.
Shihabi said Rasmala currently has more than a billion dirhams under management, mostly invested outside the Arab world.
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