Dubai Road-Toll Operator Expects to Benefit From Urban Plan

Yousef Gamal El-Din and Omar Tamo, Bloomberg News

A Salik PJSC toll gate on Sheikh Zayed Road in Dubai, United Arab Emirates, on Tuesday, Sept. 27, 2022. Dubai’s road-toll operator drew $50 billion in orders for its initial public offering, underscoring the high demand for Middle Eastern deals despite a worsening backdrop for the global economy. , Bloomberg

(Bloomberg) -- Salik Co., Dubai’s road-toll operator that drew $50 billion in orders for its IPO, expects to benefit from the city’s urban plan as the Middle East business hub lures visitors and seeks to raise its population.

The firm is “well-positioned to benefit” from Dubai’s 2040 master plan that seeks to increase the number of visitors to 25 million by 2025 and host more than 400 global events in the next few years, Chief Executive Officer Ibrahim Al Haddad told Bloomberg TV in an interview.

Salik will make its trading debut on Thursday after Dubai’s government sold a stake worth $1 billion this month. Investors snapped up all Salik shares on offer hours after the IPO opened, prompting the government to boost the size of the offering from 20% to almost 25%.

Middle Eastern listings have a been a bright spot in an otherwise slow market for share sales globally, as inflation fears and volatility have weighed on investors’ confidence. A surge in oil prices and investor inflows drove deals in Dubai, Abu Dhabi and Saudi Arabia at the start of 2022, and the pipeline remains busy even after a rally faded over the past few months.

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Salik is Dubai’s third IPO of the year. It follows those of the city’s main utility, Dubai Electricity & Water Authority, and business park operator Tecom Group. It’s part of a government plan to boost trading volumes by listing state companies.

“The recent IPOs proved that there is a global demand for Dubai great companies and great assets,” Al Haddad said. The demand for Salik IPO shows “the confidence in the Dubai financial market,” he said.