Shares of Family-Owned UAE Exchange Al Ansari Financial Services Surge in Dubai Trading Debut
The money exchange firm's IPO marks the first for Dubai this year, and shares surged over 17% in response.
Dubai's first IPO for 2023, which raised $210 million, surged on its Dubai Financial Market debut.
Al Ansari sold 750 millions shares, or 10% of the company.
Al Ansari Financial Services processes 126,000 transactions a day, and boasts a customer base of 3 million.
DUBAI (United Arab Emirates) -- Al Ansari Financial Services debuted on the Dubai Financial Market, Thursday. The shares of the family-owned remittances firm and money exchange company, the first IPO in Dubai this year, surged by over 17%.
Al Ansari sold 750 millions shares of the company.
This is equivalent to 10% of the company.
Rashed Ali Al Ansari, Group CEO of Al Ansari Financial Services, told CNBC's Dan Murphy that the sheer size and scope of the company prompted the decision to list the company publicly.
He said: "We were very pleased to see that the market was so accepting, it shows how much they trust the growth story of our company."
The sale of shares, which raised as much as $210 million dollars, was one of the very first family-owned firms in the United Arab Emirates.
Family-owned businesses account for 90% of all private companies in the UAE. Going public is an important part of government efforts to diversify its economy and attract foreign investment. Dubai announced that it would list 10 state-owned entities in 2021. This will double the capital market of the Emirate to $817 billion.
Al Ansari Financial Services IPO comes after two major listings in Abu Dhabi. Adnoc Gas raised $2.5 billion, making it the largest share sale of this year. At least eight other companies are in line to be listed in Abu Dhabi, putting it in first place for the Gulf's IPO drive.
Al Ansari, the CEO of the Al Ansari Exchange, says that despite the pressures on the global banking industry, the rising inflation, and the aggressive rate-hike cycle by central banks, the exchange has taken these risks into account when pricing its shares.
We made sure to price it correctly, considering the current market conditions and the pressures on the international economy. "We were concerned at first when we saw that the Fed was increasing rates and we had to compete against it," he said.
Al Ansari, a 55-year-old firm, attributes its success to the physical exchanges it has made rather than its online application.
Al Ansari Financial Services has 3 million customers and processes 126,000 transactions a day. Many of these are low-income earners who send money to markets that rely on remittances.
According to the United Arab Emirates, the United States is the second largest'send market' in the world, with $47 billion of outflows projected for 2022.
It is because many foreigners living in the UAE send money back to their home countries. These are mainly Pakistan, India, and the Philippines.
Al Ansari told CNBC that the remittances industry has shown resilience, as seen in 2008, and even during the pandemic. Al Ansari stated the company did not stop operating.
He said that remittances are an important service we provide to the public. It's very resilient compared to the foreign currency business which is dependent on tourism.