ADNOC Gas shares jump 19% on Abu Dhabi Stock Exchange debut

Shares of gas company ADNOC Gas soared 19% on Monday on its first day of trading on the Abu Dhabi Stock Exchange, driven by record demand amid renewed activity in the global gas market.

The action of ADNOC Gas, a subsidiary of the Emirati oil giant Abu Dhabi National Oil Company (ADNOC), ended the session at 2.82 dirhams (0.71 euro) after rising briefly to 2.96 dirhams (0 .75 euro) compared to its introductory price of 2.37 dirhams.

This stock market operation was the largest to date in the Gulf emirate.

The IPO price was intended to allow ADNOC Gas to raise more than €2.3 billion, valuing it at around €47.1 billion.

The subsidiary was created at the start of the year to bring together the operations, maintenance and marketing of gas and liquefied natural gas (LNG) from the rich emirate.

The initial public offering was oversubscribed 50 times, prompting demand of more than 108 billion euros from investors, the largest ever seen in the Middle East or North Africa.

“Demand for this stock should remain strong after this entry at a favorable price,” Monica Malik, chief economist at Emirati bank ADCB, told AFP.

To meet demand, ADNOC Gas had increased its offer to around 5% of its capital, against 4% initially planned, with the parent company retaining 90% of the shares.

ADNOC is one of the largest oil exporters in the world and is the main source of income for the United Arab Emirates.

The IPO of its subsidiary comes in a context of renewed activity on the gas market, one year after the invasion of Ukraine by Russia on February 24, 2022.

The conflict has caused Russian gas supplies to plummet, pushing Europeans to seek alternatives.

– “Transition fuel” –

The gas is also presented as being cleaner than other fossil fuels, such as coal or oil.

LNG is “the most important transition fuel in the context of the exit from hydrocarbons”, underlined the energy consultant Roudi Baroudi, of the firm Energy and Environment Holding based in Qatar.

The United Arab Emirates produced 57 billion cubic meters of natural gas in 2021, around 1.4% of global production, while LNG exports amounted to 8.8 billion cubic meters in the same year, representing nearly 1.7% of world trade, according to the bp Statistical Review of World Energy.

“As global efforts to combat climate change intensify, the role of natural gas in general (…) is widely expected to grow,” Baroudi added.

ADNOC Gas’ entry could be the first in a series of listings on the Abu Dhabi Stock Exchange this year.

According to the head of the emirate’s economic department, Sameh Al Qubaisi, quoted by the Bloomberg agency, at least eight companies should follow, in sectors ranging from new technologies to regenerative medicine, including asset management.

The emirate of Dubai, one of the seven forming the United Arab Emirates, experienced the largest IPO in the Middle East and North Africa in 2022, with the opening of 19% of the capital of its supplier of electricity and water company, Dewa, which raised 5.6 billion euros.