London introduces biggest capital rules overhaul in three decades

UK rolls out new listing rules: British regulators have pulled the trigger on the biggest overhaul of listing rules for London-listed companies in three decades, as it looks to breathe new life into capital markets amid increased international competition and investment outflows, the UK’s Financial Conduct Authority said in a statement. The new rules — which will take effect from 29 July — come as part of a wider package of reforms spearheaded by the Conservative party and expected to continue under the newly elected Labour administration.

The rule changes come as the UK looks to attract more tech firms, which have tended to go to the US where there is a dual-class structure allowing investors to maintain voting rights and control regardless of changes in the shareholding structure, the Financial Times reports. This makes it easier for investors like private equity firms and venture capitalists to maintain control of their investments post-listing.

The details: Investment groups such as private equity firms and VCs can hold supervoting rights for up to 10 years, with sovereign wealth funds allowed an even longer period of validity for the rights.

A boon for Middle East investors? The salmon-colored paper notes that the flexibility for sovereign wealth funds to invest in firms and have supervoting rights will encourage Middle East investors — who already have a lot of interest in the country’s capital markets — to list firms there.

Other changes include the removal of “premium” and “standard” categories for listings, each of which had separate requirements, and unifying and simplifying all listings’ eligibility criteria, according to the FCA.

MARKETS THIS MORNING-

Asian markets are mixed as traders mull US inflation data and the possibility of state intervention in the JPY, which strengthened against the USD early this morning. The Nikkei ended its streak of new highs with a nearly 2% dip, while the Kospi was down 1.3% at dispatch time. The Hang Seng and Shanghai indices are in the green.

Wall Street futures are flat after an unusual day that saw the S&P 500 log its worst session since April, while European futures indicate a strong open.

THE CLOSING BELL-

The DFM rose 0.3% yesterday on turnover of AED 227 mn. The index is up 0.8% YTD.

In the green: Al Firdous Holdings (+4.3%), Agility (+3.1%) and Amlak Finance (+2.7%).

In the red: Al Salam Sudan (-8.2%), Sukoon Ins. (-5.2%) and Islamic Arab Ins. Company (-3.4%).

Over on the ADX, the index closed up 0.1% on turnover of AED 1.1 bn. Meanwhile Nasdaq Dubai rose 0.4%

CORPORATE ACTIONS-

Alpha Dhabi to get larger stake in NCTH: Abu Dhabi’s tourism promotion firm National Corporation for Tourism & Hotels (NCTH) approved an increase in Alpha Dhabi ’s stake in the company by issuing 1.27 bn shares to be offered at AED 1 apiece, up from 899 mn shares in exchange for acquiring three Alpha Dhabi-owned hotel businesses, according to an ADX disclosure (pdf). The new shares will be issued after NCTH completes a AED 2.17 bn capital increase to proceed with the acquisition of Alpha Dhabi’s businesses, which include ADH Hospitality, Murban BVI Holding, and Hill View Resorts in the Seychelles.

What changed? Alpha Dhabi was initially set to receive 1.25 bn new shares following NCTH’s capital increase to AED 2.15 bn.

Background: The transaction was first revealed in March, with Alpha Dhabi’s shareholders approving the asset sale in June. Last year, Alpha Dhabi acquired a 36.4% stake in NCTH for AED 730 mn, becoming its largest single stakeholder. The companies that will be acquired — ADH Hospitality, Murban BVI Holding, and Hill View Resorts Seychelles — were originally part of Murban’s asset portfolio, but were incorporated into Alpha Dhabi’s after it acquired Murban back in 2021.