The UAE stock market has achieved a historic milestone, with its combined market capitalization surpassing $1 trillion for the first time. This achievement is attributed to a surge in initial public offerings (IPOs), strong corporate earnings, and continued diversification of the country’s economy.

Comprised of the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM), the UAE’s stock market is now larger than those of Milan or Madrid. While still behind Saudi Arabia’s Tadawul, which stands at nearly $3 trillion, the UAE market is among the most prominent in emerging markets, rivaling those of India and China.

Key Drivers of UAE Stock Market Growth

Strong IPO Activity

The UAE has seen a flurry of IPOs in recent years, with companies like Lulu Group, Talabat, and NMDC Energy successfully listing their shares. In 2024 alone, the UAE raised $1.1 billion in IPO proceeds during Q3, accounting for 69% of the GCC’s IPO capital raised.

Recent major IPOs include:

• Lulu Group: Raised Dh6.32 billion, marking the UAE’s largest listing this year.
• NMDC Energy: Generated $877 million in its September debut.
• ADNH Catering: Secured Dh864 million through a 40% stake sale.

Upcoming IPOs, including potential offerings from Etihad Airways and Alpha Data, are expected to sustain the listing momentum into 2025.

Economic Diversification Efforts

The UAE’s shift away from oil reliance has significantly bolstered its stock markets. Investments in technology, real estate, and infrastructure have created new opportunities, drawing both local and international investors.

• The non-oil sector expanded by 4% year-on-year in Q1 2024, with real GDP reaching Dh430 billion.
• High-profile investments like Microsoft’s $1.5 billion contribution to G42 and the $100 billion AI infrastructure partnership further highlight the country’s diversification drive.

Leading Companies Driving Growth

International Holding Company (IHC)

With a market capitalization of nearly $250 billion, IHC represents a quarter of the UAE market’s value. Originally a fish-farming company, IHC now invests in diverse ventures, including Aldar Properties, Elon Musk’s SpaceX, and Rihanna’s lingerie brand.

First Abu Dhabi Bank (FAB)

As one of the UAE’s largest financial institutions, FAB plays a key role in the stock market’s performance. Together with IHC, it accounts for over 50% of ADX’s benchmark FTSE General Index.

Other prominent contributors include:

• Emaar Properties and Dubai Electricity and Water Authority (DEWA) on DFM.
• Multiply Group and Alpha Dhabi on ADX.

Milestone Achievements in UAE Stock Markets

Record Market Capitalization

As of 2024, the combined value of ADX and DFM has reached:

• ADX: $801 billion
• DFM: $206 billion

This places the UAE stock market ahead of several global counterparts and reflects its growing prominence as a financial hub.

Global Standing

The UAE stock market is part of the MSCI Emerging Markets Index, accounting for 1.2% of the benchmark. While IHC is not included in the index, its subsidiaries like Aldar and Multiply Group, as well as FAB, are key components.

Sectoral Highlights

Technology and AI Investments

The tech sector is a major growth driver for the UAE’s economy and stock markets. Notable developments include:

• Microsoft’s partnership with G42, aiming to expand AI capabilities globally.
• The listing of Phoenix Group, a blockchain and crypto solutions company, which raised $370 million.
• The debut of Space42, an AI-powered SpaceTech company formed from the merger of Bayanat and Yahsat.

Real Estate Dominance

Real estate continues to attract significant investment, with Emaar Properties and Aldar Properties leading the way. DFM-listed stocks like Salik and Dubai Taxi Company have also contributed to the market’s success.

Comparative Performance

Dubai Financial Market (DFM)

• Performance in 2024: 17% growth, leading gains among Gulf benchmarks.
• Major Contributors: Emaar Properties, Emirates NBD, Salik, and DEWA.

Abu Dhabi Securities Exchange (ADX)

• Performance in 2024: 1.4% decline, impacted by broader economic factors.
• Major Contributors: IHC, FAB, Alpha Dhabi, and Multiply Group.

The UAE stock market growth to $1 trillion marks a pivotal moment in the nation’s financial evolution. With robust economic fundamentals, strategic diversification, and strong corporate performances, the UAE is poised to sustain its momentum as a global financial powerhouse.

As the market continues to attract foreign investments and support high-profile IPOs, both the ADX and DFM are set to remain at the forefront of regional and international investment landscapes.