World Markets

For Nasdaq Dubai, DP World's delisting is a 'huge loss,' says analyst

Key Points
  • DP World's delisting from the Nasdaq Dubai is "negative" for the bourse, but doesn't represent a huge setback for the overall regional market, said Nishit Lakhotia, head of research at Sico.
  • The UAE-owned port operator announced on Monday that it would return to fully private ownership.
  • Lakhotia suggested that the Nasdaq Dubai could focus on other asset classes such as futures contracts and the "booming" fixed income market.
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DP World delisting a huge loss for Nasdaq Dubai, analyst says

DP World's delisting from the Nasdaq Dubai is "negative" for the bourse, but doesn't represent a huge setback for the overall regional market, the head of research at an investment bank said this week.

"From Nasdaq Dubai's perspective, yes, it is a huge loss for the exchange given the size of the company and the amount of trading that used to happen within the exchange," said Nishit Lakhotia of Sico, a regional asset management company headquartered in Bahrain. He spoke to CNBC's "Capital Connection" on Tuesday.

The United Arab Emirates-owned port operator announced on Monday that it would return to fully private ownership. DP World's parent company, Port and Free Zone World, has offered to buy the firm's publicly traded shares for $16.75 a share.

When the deal is complete, DP World will be fully owned by Port and Free Zone World. The Nasdaq Dubai did not offer comment when contacted by CNBC.

DP World's shares traded at $15.73 on Tuesday, a 10% jump from its previous close. It closed at $13 on Sunday before the announcement was made.

Nasdaq Dubai has 'other options'

When asked what the delisting means for capital markets in the UAE, Lakhotia said: "It's not like a vote of no confidence, but yes, one has to check whether we need three exchanges all for equities."

"It's a setback, but I guess there are multiple other products that can be done, that can be introduced," he said.

He suggested that the Nasdaq Dubai could focus on other asset classes. There's "much more to be done" in the futures market and the fixed income market is "booming," he added.

"I don't think it's like a huge setback on the overall regional market," he said. "Yes, it is negative for Nasdaq Dubai from an equity perspective, but they have other options to pursue from here."

– CNBC's Natasha Turak contributed to this report.