This case is about the IPO of Air Arabia in 2007 in the United Arab Emirates. Raising capital in the UAE had begun with Decision 12, issued by the Council of Ministers in 2000; activity had grown from 2 IPOs in 2002 to 53 in 2007. A portfolio manager for EFG-Hermes in Dubai, a competitor of the IPO underwriter and book runner, needs to determine the value of an Air Arabia share. The valuation was complicated by newness of the UAE stock market, its illiquidity relative to the US or UK and the fact that it was a company with no comparable company in the region.
Learning Objective
Valuation in of stock prices in uncertain and illiquid markets
Keywords
Airline, Finance
Settings
Middle East, United Arab Emirates
2007
Available Languages
English
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