Company Press Release:
Emirates Bank Group launched their Initial Public Offering (IPO) of the equity of National General Insurance (NGI) [a subsidiary of Emirates Bank International PJSC] comprising 3,300,000 shares of AED 10, each at par. The Offer opened on February 21, and will close on the 3rd of March 2001.
Mr. Suresh Kumar, General Manager (EFS) in Emirates Bank Group mentioned that this IPO is a major breakthrough, considering that after nearly three years, the first primary market offering (or IPO) of shares is being done by a domestic company; signaling a commitment to develop robust capital markets in the UAE. He further mentioned that both EBI and the Commercial Bank of Dubai (CBD) are currently shareholders in NGI. The branches of EBI, Middle East Bank PJSC (MEB) and CBD will be accepting public subscriptions. Emirates Financial Services (EFS) will be coordinating the capital-raising and subsequent listing exercise, he added.
Mr. Sulaiman Al Mazroui, Chief Manager, at Emirates Bank Group added that NGI is somewhat of a unique insurance company in that it has a balanced portfolio with a leadership position in medical insurance. This segment will become important particularly when the federal and local authorities encourage private health insurance. NGI is well positioned to achieve significant growth in this arena.
Mr. Yacoub Yusuf Hassan, a General Manager at Commercial Bank of Dubai (also a Director on the Board of NGI) added that the Company has turned the corner and has installed IT systems, medical card equipment and capabilities for pursuing not only medical insurance but an entire gamut of general insurance in a sustained and successful manner. The benefits of its investment in technology and in the technical framework should help build revenues in future, he added.
Mr. Suresh Kumar thereafter made a detailed Powerpoint presentation which highlighted that the Company has posted a strong growth during the year 2000 and is clearly poised for geographical expansion into other emirates in the UAE; following its public joint stock company (PJSC) status.
Whereas general insurance has a 12 percent share of GDP in U.K. and Japan, it is still only 1.4 percent in the GCC—indicating the significant potential for growth in a consolidated manner.
Its balanced and diversified portfolio of products should enable NGI to smoothen out the cyclical fluctuations that are inherent in the insurance industry and provide a basis for steady growth.
Dr. Abdul Zahra, General Manager, NGI, emphasized that as shares in this IPO are being offered at par (albeit with a small service charge of 10 fils per share), the investment opportunity is attractive for UAE nationals and institutional investors to reap benefits from the synergies generated because of shareholding by Emirates Bank Group and the Commercial Bank of Dubai in NGI.
The Company expects to list its shares at the Dubai Financial Market (DFM) shortly after the IPO. The process of allotment, refund of subscriptions and confirmations of allotment are to be completed within a few weeks after the closure.
Given the positive movement of about 6 percent in the UAE stock market since 1st January 2001 (as evidenced by EMNEX), this IPO should auger well for secondary and primary markets in the UAE—particularly as it represents equity in a well-performing local company belonging to Emirates Bank Group with established credentials.
© 2001 Mena Report (www.menareport.com)
