It seems odd to cite challenging market conditions and volatility as a reason to pull a float in the current climate. Indices in the UK and US are hovering around highs – and aside from a blip in the early summer months, the year has been characterised by an absence of volatile equity market swings.
But Oger Telecom, the acquisitive Middle East telecoms company, has pulled its plan for dual stock market listings in Dubai and London, pointing to “increasingly challenging and volatile regional market conditions.”
The company decided to withdraw the listings despite “over-subscription throughout the price range” and “good support from investors in the Middle East.”
But interest in Oger, which last year last year bought TurkTelekom, Turkey’s former state telecoms monopoly, and planned to use the $150m proceeds to fund its expansion in Africa, Europe or the Middle East, was clearly not sufficient to underpin the company’s price expectations.
The benchmark DFM Index, on Dubai’s relatively young and illiquid exchange, has plunged to 2-year lows this month, tracking steep losses in the Saudi stock market, the region’s largest. The Dubai index has now lost 65 per cent of its value this year.
Oger, which is part of the Saudi Oger conglomerate owned by the Hariri family, is gaining for itself a high international profile – pledging to take on Vodafone in Turkey’s rapidly growing mobile phone market.
But that growing reputation was not enough to convince investors to give existing shareholders the price they were looking for.