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Cancelled Al Habtoor IPO hits Dubai bourse

Al Habtoor chairman cancels IPO due to price expectations not being met

The Dubai bourse lost its biggest hope for recovery in 2013 this week with the cancellation of a $1.6bn initial public offering from Al Habtoor Group.

It was slated for March or September on the Nasdaq Dubai, however chairman Khalaf Al Habtoor is said to have considered the price expectations for the IPO not high enough.

Dubai stocks are presently selling on lowly multiples and so an IPO would have to also discount to these levels, effectively giving the group away for a bargain basement price. For the Dubai stock market it is a major blow, analysts say.

The Dubai bourse badly needed a successful IPO to bring it back on to the radar screen of investors. It may now have to wait yet another year to emerge from the shadows.

It is no secret that Al Habtoor Group is building two huge hotel projects in Dubai costing $1.6 billion, exactly the amount slated for the IPO. It will now have to borrow the money to fill this gap.

Al Habtoor Group also issued a profit forecast of $192mn this year, up 16% on 2011.

An independent valuation by accountants Grant Thornton established the group as worth $6bn.

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