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Case Study

Air Arabia: Taking off in the Middle East

By Arturo Bris and Nancy Lane

20 pages

December 2010

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Reference: IMD-1-0295

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

Type

Published Sources

Available Languages

English

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