Mithaq IPO

[sharewadi]

[edit] Mithaq listing date Sunday 11 May 2008
Methaq analysis and fair price estimate [/edit]

Here's an announcement I missed, I think. Another IPO for 2008 - Mithaq Insurance IPO will be in January 2008 they say.

Mithaq Insurance (MTI) don't say which market they'll be listing on but presumably it will be the Abu Dhabi Securities Market (ADSM) since Mithaq is an Abu Dhabi based company.

So will this be like Salama (IAIC) - open to foreign ownership and actively traded? Or like almost ever other insurance company - closed to foreign ownership and rarely or infrequently traded? As Mithaq is Sharia compliant, they may be more actively traded. See also the ShareWadi summary of listed UAE insurance companies (Mithaq not included yet).

Press Release 16 December 2007:

Emirates Securities and Commodities Authority gives approval to “Mithaq” Insurance Company "Mithaq Lil-Takaful", a newly established Sharia-compliance insurance firm, has said that it has received the approval of the Emirates Securities and Commodities Authority (ESCA) to start operating in the United Arab Emirates. The Abu Dhabi-based Islamic insurance company said it will float it shares for general subscription in January 2008. The company, which has an initial capital of AED150 million will have 45% of its shares reserved for the founding members, who are mainly UAE economic personalities, while the remaining 55% of the company's shares will be floated for general subscriptions. Commenting on the new development, the chairman of the company's founding committee, Mr. Abdullah Al Qubaisi, said: "Getting the approval of the Emirates Securities and Commodities Authority is a very important step in the incorporation process of the company. This will be followed by the floating of its shares for general subscription on the UAE market. Such a development is happening at a time when the UAE is witnessing a very rapid economic growth which gave birth to a sharp growth of the insurance market, particularly Sharia-compliance liability insurance product. This has created the need for more new liability insurance companies to meet the growing demand for this type of insurance product." He added: "Mithaq" will be offering a comprehensive and high quality insurance services that would help bring stability in all sectors of the society. It will also help push forward the wheel of UAE's development by playing a pioneering role in the liability insurance sector and by providing innovative products that would suit all segments of the society."

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[sharewadi]

[edit] Mithaq ticker appears to be (MTI) [/edit]

Guess I wasn't the only one to miss the first press release ...

[rant] I'm assuming the ticker will be MITHAQ but we'll have to wait to see what ESCA says although even ESCA themselves didn't seem to realise that they'd given approval to Mithaq insurance company ... I don't see anything on ESCA's website, except for the usual message saying go away and check the stock market websites for news. Nothing on either DFM or ADSM site either.

Which makes ESCA look rather lacking in authority when they criticise news agencies for not reporting things properly. Pots and kettles spring to mind... [/rant]

Reuters 25 December 2007:

New Abu Dhabi insurer plans IPO A new Islamic insurance company has been set up in Abu Dhabi that will sell a 55 percent stake to the public in 2008, a report said. Mithaq Lil-Takaful, or Mithaq Liability Insurance Co (MITHAQ), has paid-up capital of 150 million dirhams ($40.85 million) and would sell shares in an initial public offering in "early 2008", Khaleej Times reported on Tuesday, citing Abdullah Saeed al-Qubaisi, chairman of the company's founding committee. The UAE's insurance market is growing about 30 percent a year, Qubaisi said. In Islamic insurance, or takaful, risk and reward is spread equally between the customer and the insurer, unlike in conventional insurance where the insurer takes on all risk and receives a premium. The takaful industry has grown at about 20 percent per year and could hit $7.4 billion in size by 2015, ratings agency Moody's said last year.

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[sharewadi]

The chairman of Mithaq Insurance something about "annual instalments" of UAE insurance firms is around AED480 million. I presume he means insurance premiums?

That doesn't sound like much. That means each person in the UAE is paying a total of about 100 dhs in insurance premiums per year. Now I know there's a lot of uninsured people around but all the same, I wonder how that figure was arrived at.

Cars alone should be more than that - guess about a million cars in the UAE total, each owner paying at least 1000 dhs premium (and average maybe 2000-3000 dhs), there's 1-3 billion dirhams already. Now add in life insurance, health insurance, household insurance, marine insurance...

Perhaps "annual instalments" means something else ?

Press Release 24 December 2007:

Abu Dhabi Executive Council approves “Mithaq” Insurance Company "Mithaq Lil-Takaful", a newly established Sharia-compliant insurance firm, has said that it has received the approval of the Abu Dhabi Executive Council (ADEC) to start operating in the United Arab Emirates. Abdullah Saeed Al Qubaisi, chairman of the founding committee of Mithaq Liability Insurance Company (MITHAQ), said the ADEC had given its approval for the establishment of the Abu Dhabi-based Islamic insurance company which has an initial capital of AED150 million with 45% of its shares reserved for the founding members, who are mainly UAE economic personalities, while the remaining 55% of the company's shares will be floated for general subscriptions. Al Qubaisi said: "Getting the approval of the Abu Dhabi Executive Council after similar approval from the Emirates Securities and Commodities Authority is another very important step in the incorporation process of the company. This will be followed by the floating of Mithaq Insurance Company's shares for general subscription on the UAE market. Such a development is happening at a time when the UAE is witnessing a very rapid economic growth which gave birth to a sharp growth of the insurance market, particularly Sharia-compliant liability insurance product. This has created the need for more new liability insurance companies to meet the growing demand for this type of insurance product." He pointed out that the UAE insurance market is witnessing a rapid growth rate currently at about 30% per annum, while the annual instalments of insurance firms in the UAE is estimated at about AED480 million, according to feasibility studies. He said: "Mithaq" will be offering a comprehensive, high quality and Sharia-compliant insurance services. It will provide a low-risk investment opportunity and would be supervised by a committee of competent Islamic scholars of high reputation to ensure that the company help bring stability in all sectors of the society." He added: "Mithaq" will also help push forward the wheel of UAE's development by playing a pioneering role in the liability insurance sector and by providing innovative products that would suit all segments of the society." Mithaq Liability Insurance Company had announced earlier this month that it will float its shares for general subscription in early 2008.

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[sharewadi]

I think the Mithaq IPO launched on Saturday or Sunday earlier this week. I don't know much else about it, other than what's here. And the following details from zawya.com...

Stock Market listing - Abu Dhabi Securities Market (ADSM)
Sector - Financial Services
Incorporated in UAE
Shares offered - 82.5 million
Percentage offered - 55%
Issue price - AED 1.00 + 3 fils per share
Total Equity - AED 154.50 million
Minimum subscription - 5,000 shares

Khaleej Times 30 January 2008:

Mithaq IPO sees strong response BY A STAFF REPORTER ABU DHABI - The initial public offering floated by Mithaq Takaful Insurance, a Dh150 million capital Shariah-compliant company under establishment, has been eliciting overwhelming response, beating all expectations, according to Abdullah Saeed Al Qubaisi, chairman of the founders committee of the company. About 82.5 million shares, representing the 55 per cent of the company's shares, were floated at a nominal value of Dh1 per share. Al Qubaisi expected more investors to turn out to apply for the shares of Mithaq, the third Islamic insurer in the UAE.

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[sharewadi]

[bio4jaa]

It seems like they ran out of ideas to create new companies, its wither a bank, finance company, or insurance company....We need new companies, how about IT companies with no fancy shareholder name...a company with a legitimate CEO who knows how to grow a company...rather than a company hiding behind the shareholder value

Bio

[sharewadi]

Mithaq IPO closed 43x oversubscribed. Wow. That sounds good. Could be a promising indicator for the Ajman Bank IPO coming up next week.

Mithaq (MTI) listing on the Abu Dhabi Securities Market (ADSM), sometime in March 2008.

Reuters 14 February 2008:

UAE Islamic insurer IPO 43 times oversubscribed By Stanley Carvalho ABU DHABI - Gulf Arab investors offered 3.6 billion dirhams ($980 million) towards the initial public offering of an Abu Dhabi-based Islamic insurer, 43 times more than the firm was seeking, the IPO adviser said. Mithaq Lil Takaful (MTI) sold 82.5 million shares at 1 dirham each, equivalent to 55 percent of the company and valuing it at 150 million dirhams, Majd Maaitah, senior manager for securities services at National Bank of Abu Dhabi (NBAD), told Reuters. The nine-day sale closed on Feb. 4. The shares will list on the Abu Dhabi exchange (ADSM) at the end of March, Maaitah said on Thursday. "The response was very good," he said. Non-Gulf Arab citizens will be able to own as much as 25 percent of the shares once they list. It was the first IPO in the United Arab Emirates in 2008, in one of the worst months for local markets, which have been spooked by fears of recession in the United States, the world's largest economy. Four days before the sale started, Dubai's main stock index .DFMGI fell 6.21 percent, its biggest one-day loss since March 2006. Abu Dhabi's benchmark .ADI plunged 6.8 percent that day and Saudi Arabia 10 percent, both a record. Islamic insurance is a growth industry that is mirroring the expansion of Islamic finance. "There is a huge demand for Islamic insurance or takaful in this region, and the new company is aiming to get a share of the pie," Mithaq Chairman Abdulla Saeed al-Qubaisi told Reuters last month before the IPO. "The insurance business is growing at 15 to 20 percent annually, and is projected to double by 2010," Qubaisi said. In Islamic insurance, or takaful, risk and reward is spread equally between the customer and the insurer, unlike in conventional insurance, where the insurer takes on all risk and receives a premium.

However, the KT reported the Methaq / Mithaq IPO as being 20x oversubscribed a week earlier. Odd . What's the correct figure?

Khaleej Times 06 February 2008:

Mithaq Takaful IPO 20 times oversubscribed Mithaq Takaful Company (MTI), a Dh150 million under establishment public joint stock company, recived 20 times oversubscribtion for its initial puiblic offering (IPO), launched last week. Abdullah Saeed Al Qubaisi, chairman of the founding committee of the company, said the subscription has seen overwhelming response from UAE and Gulf Cooperation Council investors that beat all expectations. The Abu Dhabi-based Shariah-compliance insurance company, had offered 82.5 million shares for public subscription at par value of Dh1, representing 55 per cent of total shares of Dh150 million.

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[sharewadi]

This report after the Mithaq (METHAQ) founding general assembly doesn't say how many times oversubscribed it was, so there's still the two conflicting numbers in previous reports. No information on listing date either. Found this news in KT, but it reads like a press release.

Khaleej Times 28 February 2008:

Islamic insurance firm set up By a staff reporter Abu Dhabi - The meeting of the founding general assembly of Mithaq Takaful (MTI), a new Islamic insurance company with a paid up capital of Dh150 million, declared the formal establishment of the company and appointed a nine-member board of directors. Dr. Mohammed Al Khazraji, legal adviser to the company said the founders and shareholders were presented yesterday with two reports on the establishment of the company and initial expenses of the IPO. ''The article of association was approved and the board of directors was also named during the meeting,'' he added. The Abu Dhabi-based Shariah-compliance insurance company, earlier this month, had offered 82.5 million shares for public subscription at par value of Dh1, representing 55 per cent of total shares of Dh150 million. The remaining was reserved for founding members. According to a report by the National Bank of Abu Dhabi (NBAD), the IPO book runner, around 14,111 individuals subscribed shares valuing at Dh 80.7 million, while 155 shareholders subscribed share amounting to Dh 69.3 million. Abdullah Saeed Al Qubaisi, chairman of the founding committee of Mithaq Takaful said the public joint stock company company was set up to contribute to the private sector's efforts in the development of the Islamic insurance industry. ''Insurance is now one of the major sectors in the achievement of socio-economic stability," he affirmed. The 43 member Emirates Insurance Association see the growth of the sector to double by 2010. The sector is growing at 25-20 per cent a year. Mithaq will be offering comprehensive, high quality and Shariah-compliant insurance services. It will provide a low-risk investment opportunity and would be supervised by a committee of competent Islamic scholars of high reputation to strictly follow the principles of Islamic finance.

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