Dubai's DP World shares climb on equity sale report

DP World shares rose to a three-week high on Sunday after a newspaper report said it may offer new shares to shareholders and troubled parent Dubai World could sell an additional stake.The port operator, which has a market capitalisation of about $6.7 billion, is considering offering 5 percent of its shares in a rights issue, while its mother company could offer a 10 per cent stake to the public, a move which could raise $1 billion, local daily The National reported.

Citing unidentified senior sources at the company, the report said DP World was aiming to become part of the FTSE 100 share index in a bid to boost liquidity and raise the stock's free float shares to 35 per cent. A DP World spokeswoman declined to comment. "We believe the appetite for equity in the potential new listing is likely to be solid, given the emerging market exposure and excellent cash flow generation offered by the stock, partially offsetting its perceived Dubai risk premium," said Ian Munro, MAC Capital head of research, in a note to clients.