Case Study

Air Arabia: Taking off in the Middle East

20 pages
December 2010
Reference: IMD-1-0295

This case is about the IPO of Air Arabia in 2007 in the United Arab Emirates. Raising capital in the UAE had begun with Decision 12, issued by the Council of Ministers in 2000; activity had grown from 2 IPOs in 2002 to 53 in 2007. A portfolio manager for EFG-Hermes in Dubai, a competitor of the IPO underwriter and book runner, needs to determine the value of an Air Arabia share. The valuation was complicated by newness of the UAE stock market, its illiquidity relative to the US or UK and the fact that it was a company with no comparable company in the region.

Learning Objective

Valuation in of stock prices in uncertain and illiquid markets

Keywords
Airline
Settings
Middle East, United Arab Emirates
2007
Type
Published Sources
Copyright
© 2010
Available Languages
English
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