Drake Scull DSI listing

[sharewadi]

Drake and Scull (DSI) listed on the DFM today, ticker is DSI (I managed to guess it right for a change - thought I saw somewhere it was going to be DRAKESCULL).

DSI share price is down 24% to AED 0.76 as of 1pm, from par value of AED 1.00. Not as bad as I expected. I think most people would have been surprised had it listed at par or higher, given the horrendous falls in other stock prices in the past few months. Turnover is high, which you'd expect for a new primary listing of an IPO. Traded value of AED 434m from 546m shares as of just after 1pm, about 78% of the total turnover for the DFM. So far, the high for the day was 0.84 and the low 0.74.

There was also a press release yesterday about a big deal awarded to Drake & Scull in Bahrain. Good timing. Although it didn't stop their shares from falling off the par. Would you call this a Bogey Listing ... or perhaps an Albatross ? ...

Press Release 16 March 2009:

Drake & Scull International debuts trading on Dubai Financial Market The leading regional exchange welcomes its first listing in 2009 Dubai Financial Market (DFM), the first regional exchange to go public, and the first shariah complaint market globally, today announced the listing of Drake & Scull International PJSC (DSI), engaged in mechanical, electrical, plumbing infrastructure water, and power and civil contracting. Company shares began trading on Monday, March 16th , 2009, under the trading symbol “DSI” within the real estate and construction sector, which will appear on DFM screens, trading systems and publications. Drake & Scull International PJSC is the first public joint stock company to list in DFM in 2009. The listing of Drake & Scull International brings the total number of public joint stock companies listed on the DFM to 65 company, while the total number of listed securities reached 87. Essa Kazim Executive Chairman of Dubai Financial Market; Majed Seif Al Ghurair Chairman of Drake & Scull International; and senior representatives from the company along with DFM top management, attended the listing ceremony. Kazim welcomed the new listing as a vital addition to the suite of equity offerings available on the market. The listing further highlights the leading position of Dubai Financial Market as the preferred destination for outstanding local and regional companies seeking to list its shares. Kazim said: “Dubai Financial Market is constantly looking to expand and diversify the opportunities available to investors by encouraging and partnering with companies from around the region, active in different sectors to benefit from trading on the region’s leading stock exchange. Companies from across the region also look upon DFM as an attractive exchange with a proven track record of professionalism and state-of-the-art facilities. Due to the high level of liquidity in the market, companies are very eager to capitalize on their growth through a trading and fundraising window in the UAE.” “We at DFM are keen to expand our securities list with companies represent different sectors that gives the market more depth and diversified investment opportunities. the listing of local companies went through an IPO, undoubtedly, plays a key role in enhancing the market activity as learned from the previous listing of local companies” Kazim said. He added: “We are delighted to welcome Drake & Scull International to the DFM, which lists many regional companies in line with its strategy of strengthening the exchange’s position through diversification and expansion of options for investors. The listing of Drake & Scull International is highly important as the first public joint stock company to join our prestigious listings of local and regional companies since the beginning of 2009, a step which will be followed by many other listings either from UAE or the rest of the region. Today’s listing reflects the high level of confidence businesses has in the stock market and the role the market plays to support the growth story in different companies.” Drake & Scull International PJSC Vice Chairman and CEO Khaldoun Tabari said: “This is quite possibly the proudest day in our 43 year history. To be the first end to end specialist contracting company to list on a stock market of DFM’s pre-eminence, brings with it enormous benefits of visibility, access and unrivaled opportunity. We intend to exploit each to the full.” He also added: “We had an extremely strong response for our IPO. It indicates that investors clearly see the opportunity in DSI growth strategy across the region. We would like to thank the founding members and the investors and look forward to creating long term value for all our shareholders”.

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[sam111sam]

At the closing price of 0.74Dhs The market cap is now Dhs 1611m
2007 profit was Dhs 100m (E/R 16)
2008 profit was Dhs 152m (E/R 10.x)
2009 forecast Dhs 200m (E/R 8.x)
Comapny estabilshed in 1966

Solid fundamentals (if they make their forecast), but Arabtech is far much better 2008 E/R is 2.1... At the same profitability (E/R =2.1) DSI would need to be priced at 16 Fils

Did I miss anything ?

By the way, during DSI IPO , ARTC used to trade at 12-14 Dhs (before the split) which is 400% of the current market price of ARTC. So if we assume that DSI was listed during the IPO and followed Emaar and ARTC in the decline it would have been trading now at 20-25 Fils.

[blessoni]

I have lost my shares allotment papers for Drake and Scull .I had applied through Union Brokerage.Can someone tell me what to do?
Thanks..

[bandakok]

Loosing more than 25% first day and again today looks bad, how much can investors sustain this ? why they dont just start at 10 FILS and watch it go up.
It looks like a fair price for any stock these days is 50 FILS no matter which stock and what preformance the company has.

[sharewadi]