Security token sales are picking up in the UAE as a $100m security token sale by Sumner Group targeting Middle East investors could see the country become a global hotspot for these transactions.
Despite the lack of formal local regulations in the onshore market governing sales, SGH Global, a Jersey-based company announced in March a $100m security token offering (STO) sale targeting investors in the UAE and wider Middle East. The proposal has attracted Abu Dhabi investors Blue Rock Capital and Blue Stone Capital that have signed intentions of $10m each, the company said.
"Investors have liked the digital nature of the investment. It's been a bit of a surprise. If we get this right, I think we will close the transaction out all in the private placement," David Sumner, the chairman and CEO of SGH Global said, Zawya reports.
Investors have liked the digital nature of the investment. It's been a bit of a surprise. If we get this right, I think we will close the transaction out all in the private placement"
SGH Global, whose assets include two gold and silver mines in Peru, is planning a public listing on the main market of the London Stock Exchange in 2020.
In the first quarter of the year, the UAE security token offering landscape attracted $67m in investment, around 56% of the total funds raised worldwide by STOs, according to InWara, a crypto market intelligence platform. However, just two STOs were launched in the UAE in Q1, of the total of 47 STOs launched globally, according to the CEO of InWara, Nirmal Lekshminarayanan.
When initial coin offerings (ICOs) and STOs are combined, one-fifth of all funds raised globally in Q1 2019 were raised by companies based in the UAE, Lekshminarayanan said.
However, the UAE's Q1 activity remains "a far-cry from what 2018 was, with Cayman Islands, USA and the UK dominating the marketplace," he added.