Falling markets, delays slow Dubai exchange

By Will Rasmussen

DUBAI (Reuters) - Dubai's international exchange is waiting for markets in the region to stabilize and for the country's government to push ahead with asset sales before it expects to attract the listings it has so far failed to deliver.

Dubai trumpeted the launch of the Dubai International Financial Exchange (DIFX) in 2005 as the birth of an Arab Hong Kong, but it has since only attracted a handful of listings.

"It all depends on how fast the government will move forward in its privatization strategy," DIFX Chairman Henry Azzam told the Reuters Middle East Investment Summit in Dubai on Monday.

"It's taken the government longer than expected to bring jewels like Emirates Airline and Dubai Ports to the market," he added.

Dubai Ports World, which bought British port operator P&O last year for $6.8 billion, had said in November 2005 it would list shares within two years.

The exchange has two initial public offerings on the horizon with at least one by the end of 2007, Azzam said, without giving further details.

Four of the region's seven markets lost more than 35 percent of their value in 2006, including the Dubai Financial Market, the emirate's domestic bourse, where most companies restrict foreign ownership of their shares.

Dubai-based Oger Telecom canceled a $1.25 billion initial public offering in November on fears that tumbling Gulf markets would hit the share price after listing on the DIFX.

"Would you bring a first-class company to the markets when they are crumbling?" Azzam said. "I wouldn't advise it."

-- Additional reporting by Dayan Candappa