The Abu Dhabi government has launched a $1.4 billion IPO fund designed to increase the number of listings on the Abu Dhabi Securities Exchange (ADX) and attract more international investors.
The fund launch was announced by the Supreme Council for Financial and Economic Affairs as part of a plan to develop the ADX as a leading international exchange, according to the state’s media office.
It will invest in five to ten private companies per year with an emphasis on small and medium enterprises and will target a ticket size equivalent to between 10% and 40% of the float.
The ADX has seen an increase in the number of listings so far this year while the Abu Dhabi stock index .ADI is up by 54% so far this year.
The surge in IPOs has been largely driven by higher oil prices and the state-owned Abu Dhabi National Oil Co (Adnoc) has listed several of the companies it owns, as has the Abu Dhabi sovereign wealth fund Mubadala.
However, Abu Dhabi still trails Saudi Arabia in terms of the size of its IPOs. This month saw the debut of renewable energy company Acwa Power International which raised $1.2 billion in the first few days of the listing, making it the biggest IPO since state-owned oil company Aramco raised $29 billion from its December 2019 share offering.
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