Global Equity International, Inc
Why List or Dual List on the NASDAQ Dubai?
(PublicWire.com Press Release) — DUBAI, UNITED ARAB EMIRATES, Feb 04, 2014 (Marketwired via COMTEX) — Global Equity International, Inc. (OTCQB: GEQU) and its fully owned subsidiary Global Equity Partners Plc. (“GEP”), a specialist consultancy firm with offices located in Dubai and London is pleased to announce that today the Company has taken the determination to apply for a dual listing on the NASDAQ Dubai early 2014.
Why list or dual list on the NASDAQ Dubai?
Global Equity International, Inc. (OTCQB: GEQU) and its fully owned subsidiary Global Equity Partners Plc. have developed a unique relationship with the Nasdaq Dubai market to offer IPO, technical listings and Dual listings in the local market. NASDAQ Dubai is the key representative market for the Middle East and North Africa Region and it offers incredible liquidity and financing options otherwise not seen. The market is on a push for more dominant foreign awareness of its facilities and GEP are heading up that push along with the market itself and are working hand in hand with the senior management board of NASDAQ Dubai to attract more companies via GEP into the market.
The ruling families in the UAE have created a 50 year plan for Dubai, the first 15 years of the plan have been to create a tourist and business centric city which it would be fair to say has very definitely been achieved. In 2009, the next phase of the growth plan for Dubai was implemented, to not only become the Financial Centre of the Middle East, but to be seen globally as a Financial Market competing with the likes of Hong Kong and Singapore. The corner stone of the plan is to create an exchange that attracts International and regional companies to Dubai in order to raise capital and to become a Centre of excellence for research and development.
In 2010 the highest authorities merged the two exchanges of NASDAQ Dubai and Dubai Financial Markets (DFM) to create a very deep and significant liquidity pool and invested hundreds of millions of dollars in IT and infrastructure and have created one of the most advanced facilities in the World. The best way to describe both exchanges is to look at NASDAQ Dubai as being the Institutional market with all the major financial institutions of the region trading the exchange daily and also the usual recognized brands of JP Morgan, Morgan Stanley, Deutsche Bank and HSBC and many other well-known organizations that have representation in the UAE. DFM could be described as the retail market with approximately 550,000 ultra-high net worth individuals who trade the exchange on a daily basis, in this instance an ultra-high net worth individual will have very significant assets possibly in the hundreds of millions in many cases.
By way of example and to have some idea of the depth of the capital available there are approximately 10,000 companies on the boards of NASDAQ North America, on certain days during 2013 liquidity touched one billion dollars which is a good performance given the state of the markets over the last few years. NASDAQ Dubai in its new form has 75 companies listed on the exchange and on certain days during 2014 $700 million dollars were traded across only 35 stocks. The depth of capital is very apparent and the institutions and high net worth individuals alike have a huge appetite to invest in good International companies and the expectation and momentum that is being created around the market in Dubai is building into a potential feeding frenzy for investment. The last IPO in Dubai was in 2008 and the reason why no IPO has been done since is due in part to the economic down turn but also because until recently it has been prohibitive for International companies to list on the exchange mainly because of regulation. For example prior to 2011 any International firm seeking a listing or IPO had to give up 51% of their company to a local sponsor. This rule has now been removed which was the start of the reduction in the many barriers to entry. An International company does not have to be a registered Dubai company and neither does a local have to be on the board of the firm.
The highest authorities want NASDAQ Dubai to be recognized not just as the leading exchange in the Middle East but also as a globally recognized exchange that is highly regulated and has excellent corporate governance in place to give comfort to global investors. The DFSA is almost a blue print of the Financial Services Authority (FSA) in London and in the past three years they have recruited some very experienced senior regulators from London and Europe to make sure that their needs and the needs of the global markets are met.
The appetite of the markets in Dubai is formidable but there is another aspect that offers an even greater attraction. Brand Dubai is the absolute focus of the highest authorities who have recognized a gap in the global markets that they see exists between New York and the markets of South East Asia, and brand Dubai intends to fill that perceived void.
Dubai has recently been upgraded by Morgan Stanley Capital Index (MSCI) who are the recognized global benchmark for exchanges from frontier to emerging market status which becomes effective in May, when that happens the global emerging market funds are obliged to inject liquidity into NASDAQ Dubai which is forecast to be anywhere between $4 and $5 Billion USD. In order to achieve this they need to attract International companies, get them capitalized and show to the global business community that their regulatory and corporate governance frameworks are well structured in place and working efficiently.
Whilst this is attractive, to brand Dubai it is secondary to their main aim which is to achieve emerging market status and then move beyond that target as soon as possible in order to compete globally with the major exchanges in South East Asia and Europe. As a result they are applying pressure to the local investment community, Exchange, and regulators to have between 20 and 30 additional companies listed on the market by the end of 2014 for 200 to 300 companies to be listed in Dubai by 2016. The latter target may seem unrealistic but they will try and achieve that target and will do what it takes to get there if at all possible.
Reputational risk in the Middle East is paramount and no organization or individual in the region wants to have their reputations tarnished in any way. In August 2012 regulation was changed in Dubai to reflect this issue and to make sure that Institutions were focused on companies wishing to successfully raise capital on the market. It was announced that any company seeking an IPO in Dubai had to have a fully regulated financial sponsor; the responsibility of the sponsor is to underwrite the company and act as guarantor. It is highly likely that any sponsor who is signed up to take a company public will also take up the offering or at least support and raise the capital required pre IPO, at IPO and post IPO as no sponsor will want to be seen to have failed.
However since the beginning of 2013 GEP have been negotiating with both the exchange and the regulators to allow companies to do a technical listing on the market and to have a liquidity event (IPO) at a later date. This has now been approved by both the exchange and the regulatory authorities and will allow a company seeking to raise capital to take on a technical sponsor e.g. a recognized Law Firm, Auditor or Management Consulting firm. The non-financial sponsor will still underwrite the company and act as guarantor, produce and get approval from the DFSA for the prospectus and also apply for the company’s ticker symbol. Once these tasks have been completed the company is then listed on the exchange but no shares are traded or issued, this allows the company to build its profile in the region and to educate over time the Investment community through a well presented IR/PR campaign. At a later date once the market has its eyes on the stock an IPO can take place and is potentially more efficient in raising capital as the valuation, price and performance of the company are interlinked. This approach is far more attractive to the Dubai Financial Sponsors as the reputational risks are removed allowing them to focus purely on financial investment rather than have concerns over reputational risk.
An IPO requires a fully regulated Financial sponsor, as previously stated once a financial sponsor has been signed up they will be fully focused in co-operation with GEP on getting the company capitalized on the exchange and through pre-IPO funding if required. The market in Dubai is currently perfectly geared towards IPO’s as a relentless momentum is building towards the first companies coming to market in the first half of 2014, in fact the first IPO is taking place in the next few weeks, and at the end of 2013 the first technical listing was completed.
GEP are currently working with two US based companies to bring them to the public markets of Dubai during 2014, one a stem cell therapy firm and the second a company that process’s pre-paid credit cards, credit cards, store cards and loyalty card. Close behind these two companies we will be bringing to the Dubai exchange in 2014 for IPO’s and listings a Dutch renewable energy firm, a Dutch cancer treatment company, a Scandinavian Agricultural Commodity company, a Marine / shipping company, three Mining firms and two Oil & Gas organizations. We are also in the final stages of agreeing terms with other organizations for listing on the Dubai Exchange including an African Bauxite Mining Firm headquartered in London, a London based Copper mining company, a Diamond mining firm, a West African Uranium Mine and two Iron Ore Mining companies one in West Africa and a UK Digital Media company and a US technology company.
With the majority of the companies we are currently engaged with we are also successfully raising pre-IPO funding through our strong links with funds in Dubai the Mid-East generally and in New York and Singapore which is part of the process we have put in place when taking companies public. There are certain sectors that the markets in Dubai have very specific appetites for with regards to investment. Oil & Gas, Healthcare, Pharmaceutical, Technology, Mining, Manufacturing and Engineering and African deals or regional to the Middle East. It is important to recognize that any company coming to market in Dubai that also contributes from a business perspective locally or regionally very definitely ticks a box.
About Global Equity International Inc. and its fully owned subsidiary, Global Equity Partners Plc.
With offices located in Dubai and London, Global Equity International Inc and its subsidiary, Global Equity Partners Plc. (“GEP”), advise worldwide business leaders with their most critical decisions and opportunities pertaining to growth, capital needs, structure and the development of a global presence. With significant relationships in USA, UK, Central Europe, the Middle East and South East Asia, we assist our clients with finding their true potential by bringing to them external capital and resources that place an emphasis on collaborative thinking. With a physical presence in DUBAI, we introduce our clients to the unique opportunity of becoming listed on the NASDAQ Dubai Exchange. The NASDAQ Dubai offers exciting opportunities for newly listed companies with exposure to a large reservoir of registered funding agents and wealthy individuals looking to enhance their portfolios with the very best companies Global Equity Partners Plc. has to offer.
This press release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for markets and the demand for products. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statements. Such statements are based upon, among other things, assumptions made by, and information currently available to, management, including management’s own knowledge and assessment of the Company’s industry and competition. The Company refers interested persons to its most recent Annual Report on Form 10-K and its other SEC filings for a description of additional uncertainties and factors, which may affect forward-looking statements. The Company assumes no duty to update its forward-looking statements.