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I don't know if this exits already but do you think Arab tech companies can go public ? Is there a market for their stock ? |
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This is a great question and I think it has two sides. 1. How hard is it to go public in an Arab stock exchange? I think it's possible for any firm to be listed given certain financial standards; getting listed in an Arab stock exchange seems relatively similar to getting listed in the NYSE. You need a minimum balance sheet + income + some kind of proof of operations, but I think this should be possible. If anything, stock markets benefit most when they deliver things that their investors want. So if investors want to buy public stock in a company, the stock market will probably let them, unless there's something illegal or against regulations about it. The stock exchange takes a cut off of every transaction, so anything that would increase trading volume is likely in their favor. 2. Will people buy stock in a new company on the exchange? Perhaps this is the main question to be asking. We established that stock exchanges will probably support these companies if investors want to buy into them. So now, will investors buy into them? Well, there has to be some kind of critical mass of people who want to buy. I doubt that any exchange will list a firm that get no trading volume. I wonder if the risk profile of the average ME investor supports such an investment; I have a feeling that it will in the future years. There's also a huge landscape involved with investment banks helping companies going public and establishing Initial Public Offerings; I wonder how this could shape itself with the principles of Shari'a Finance. Honestly, I think that the Islamic Financial system has a lot going for it, especially in today's landscape. Maybe Islamic Banks could be the answer to getting high tech companies listed publicly on Middle Eastern stock exchanges. |
