Dubai's liquidity may jump on Emaar Malls IPO refund

EMG closed subscriptions Friday and will announce the final offer price on Monday, according to its prospectus

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Dubai's stock market looks set to see an influx of cash this week when Emaar Malls Group (EMG) returns to investors the surplus funds from subscriptions to its initial public offer, which could boost the prices of other stocks.

EMG, a subsidiary of Dubai's largest listed developer Emaar Properties, closed subscriptions last Friday and will announce the final offer price on Monday, according to its prospectus.

Sources familiar with the matter told Reuters last week that the offer's institutional tranche had been subscribed 7.5 times at the top end of the 2.50-2.90 dirham price range, while the retail tranche was subscribed 20 times.

That means the IPO, which is expected to raise $1.58 billion, attracted as much as $17.8 billion in total, or more than a fifth of the market capitalisation of Dubai's main index .

The prospectus does not set an exact date for the refund of surplus funds but says it must be done no later than Oct. 1 - so investors seeking to front-run the inflows may start bidding up local stocks as soon as on Sunday.

Shares in construction firm Arabtec may attract interest after the firm said on Sunday it was close to completing the planning and design stage of its $40 billion deal to build one million homes in Egypt, denying a media report suggesting it was no longer as committed to the project.

Elsewhere in the region, Saudi Arabia's bourse may resume its recovery after ending a profit-taking bout last Thursday, but the upcoming Eid al-Adha holiday may limit investors' activity. The stock exchange said last Thursday it would close for the whole week starting on Sunday, Oct. 5.

Other markets are likely to take shorter breaks. The government of the United Arab Emirates, for example, announced only one day off, Oct. 5, for the private sector.

The global backdrop is positive after Wall Street rose last Friday on data showing the U.S. economy grew at its fastest pace in more than two years in the second quarter.

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