Overcoming financing constraints to corporate expansion: evidence from a company in an emerging Islamic market

The sourcing of low-cost finance to facilitate corporate expansion on competitive terms is a major challenge to firms from emerging markets. There are additional constraints in Islamic markets as financial instruments must adhere to shari’ya law. This paper examines the approach taken by the Sudan Telecommunications Company (Sudatel) to obtain cost effective equity financing using secondary listings on multiple Middle East and North Africa (MENA) stock exchanges. We compare the costs of equity for Sudatel stock on the Sudan and Abu Dhabi Exchanges, and compare these figures with those for Sudatel’s two main regional competitors. Furthermore, we highlight the risk-return trade-off faced by investors in Sudatel stock on both Exchanges, and provide evidence of the potential benefits to investors from the overseas listing.