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Thursday, September 11, 2025

Retail investors edged out of region’s equity rush

تم إعداد هذا المنشور من قبل فيجاي فاليتشا

Retail investors edged out of region’s equity rush
 
   

Vijay Valecha, September 11, 2025, Arabian Gulf Business Insight

Gulf equity markets are enjoying a historic run, with IPO proceeds exceeding $4 billion in the first half of 2025, according to S&P Global. Yet the spoils are increasingly reserved for state-backed giants and family conglomerates, with retail investors sidelined in the region’s equity rush.

In the latest example, Du, the UAE telecom operator, launched a 7.55 percent secondary offering through Abu Dhabi sovereign wealth fund Mubadala’s subsidiary Mamoura. Just 5 percent of shares were earmarked for UAE retail investors, with the bulk going to institutional buyers at home and abroad.

The preference for institutional allocations reflects a push by regulators and issuers for long-term price stability. But it is also raising concerns over limited access for individual investors, even as they show appetite to participate in the region’s capital-markets boom.

Saudi Arabia, which led the region with $1.9 billion of the $2.5 billion raised through offerings in the second quarter, has followed a similar pattern. In oil giant Aramco’s $11.2 billion secondary share sale in June last year, just 10 percent was allocated to retail investors, despite more than 1.3 million subscribers.

Foreign institutions dominated the order book, taking 58 percent of shares, while the final retail allocation amounted to just 0.76 percent of Aramco’s issued shares. In neighbouring UAE, foreign participation in equity markets is similarly strong overall, but overseas retail investors retain a relatively small presence.

Retail and high-net-worth individuals accounted for 29 percent of trading activity on the Dubai Financial Market (DFM) as of the first half of 2025, broadly in line with developed markets such as the US and UK, according to exchange data.

However, that activity is largely driven by domestic investors, with foreign individuals making up a small fraction, at just over 8 percent.

The disparity is especially apparent in allocations of initial public offerings. Landmark listings such as Dewa, Salik and Parkin allocated just 7 percent to 12 percent of shares to retail investors.

“Crucially, those retail tranches were ring-fenced for UAE nationals and residents, which means foreign individuals were effectively excluded unless they could qualify on the institutional side,” says Vijay Valecha, CIO of Century Financial.

In Oman, the IPO of OQ Exploration and Production SAOG in September last year offered a 10 percent discount for Omani national investors.

Source:

Arabian Gulf Business Insight


    
    
    
   
 
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