The rise of the DFM and ADX has had a major economic impact on the United Arab Emirates. On the one hand, partial privatizations and fund-raising on these markets have made it possible to finance strategic infrastructure and free up resources for public investment. For example, DEWA's IPO not only brought fresh capital to the state-owned company, but also strengthened the liquidity of the domestic market by broadening the shareholder base. On the other hand, stock market dynamism stimulates economic diversification: non-oil sectors (utilities, telecoms, logistics, real estate, healthcare, etc.) account for a growing share of capitalization, reflecting the boom in these industries. Local companies benefit from new sources of equity financing to support their growth, while investors can participate in the performance of the national economy. Capital markets also enhance the country's financial attractiveness. The inflow of foreign capital is one indicator: in 2022, the ADX recorded net inflows of AED 24 billion in foreign investment, a record level boosted by the confidence of international investors. Similarly, the DFM attracted some AED 5 billion in net foreign purchases in 2022 (+167% year-on-year), a trend extended into 2023 with over 57,000 new investor accounts opened (+12.5% year-on-year). This expansion of the investor base, combined with increased liquidity (annual transactions on DFM jumped by 32.7% in 2023), translates into a greater capacity of the financial market to support the real economy. Ultimately, the rapidly rising market capitalization of more than AED 3.9 trillion at the end of 2024 illustrates the growing weight of capital markets in national financing and the country's overall economic wealth.
Recent progress in the UAE markets is largely due to reforms and strategic initiatives undertaken by the authorities to strengthen the financial sector. Faced with competition from major regional exchanges (notably Saudi Arabia) and after a few years of relative stagnation, Dubai launched an ambitious plan at the end of 2021 to revitalize its stock market. The plan called for the listing of 10 public companies to raise the capitalization of the emirate's financial market to AED 3,000 billion. Its rapid implementation, with four state-owned companies listed by 2022 (including DEWA), sent a strong signal to investors. At the same time, two dedicated funds were created in Dubai to support liquidity and IPOs: an AED 2 billion market-maker fund aimed at increasing trading volumes, and an AED 1 billion fund to encourage the IPO of local technology companies. Abu Dhabi had initiated a similar move, making the ADX one of the region's top-performing stock markets by 2021-2022, thanks to a boom in IPOs and the opening up of the market to international investors. In particular, the ADX has innovated by welcoming free zone registered companies (ADGMs) to the main market, such as Fertiglobe in 2021, thus broadening the universe of eligible issuers. Regulatory reforms have accompanied this expansion, such as the adoption of a modernized framework for investment funds and the creation of specialized financial courts in Dubai to secure the legal business environment. In addition, the harmonization of the Emirati market with international practices has accelerated (alignment of the listing week with the Western calendar, development of ESG indices and innovative platforms). In 2022, the ADX launched a derivatives market and new benchmark indices in partnership with FTSE Russell, while in 2023 the DFM inaugurated the first regional carbon credit trading platform during COP28. The combined impact of these measures is a sustained boom in the UAE's financial center, characterized by increased market depth and enhanced investor confidence. With a growing economy (~4% real GDP growth expected in 2024) and a broadening investor base, the Dubai and Abu Dhabi stock exchanges are looking to the future with optimism. Recent trends of capital inflows, dynamic IPOs and diversification of players are set to continue, consolidating the role of the DFM and ADX as pillars of financing and economic development in the United Arab Emirates.
Since 2021, the Dubai Financial Market and the Abu Dhabi Securities Exchange have witnessed a veritable explosion in IPOs, illustrating the UAE's transformation into a key regional center for IPOs. In 2023, as global markets slowed, the Gulf Cooperation Council saw 46 issues materialize for a total of USD 10.79 billion, including USD 6.07 billion from eight UAE IPOs, or 56.3% of the regional total, according to Kamco Invest. This momentum is in line with a series of large-scale operations launched since 2022.
Strategic sectors were the first to benefit from this boom. In utilities, the IPO of DEWA (Dubai Electricity and Water Authority) in April 2022 remains, at AED 22.32 billion (USD 6.1 billion), the largest ever in the Emirates and the second largest regional deal since 2019. In the energy sector, the ADNOC Gas issue in spring 2023, the largest of the year's eight IPOs, illustrated Abu Dhabi's determination to increase the value of its gas assets while attracting international investors. The healthcare sector was not left behind: PureHealth, a healthcare conglomerate, closed the top tier of regional issues by raising nearly 0.99 billion USD in its IPO, testifying to the broadening of the offer to technology and medical conglomerates.
Three converging factors explain the boom in IPOs: firstly, the government's strategy of partial privatizations, which transferred a significant proportion of the capital of public companies to the stock market, strengthening governance and freeing up resources for new projects (Reuters privatization programs). Secondly, the context of abundant liquidity boosted by high oil revenues and robust non-oil growth of around 5% a year encouraged sovereign wealth funds and private investors to seek out assets uncorrelated with developed markets. Finally, the international appeal of the Dubai and Abu Dhabi stock exchanges, supported by global roadshows and a modernized regulatory framework, facilitated access to foreign investors.
Beyond sector diversification, this move has profoundly strengthened the depth and efficiency of local markets: higher floats and trading volumes have narrowed bid-ask spreads and consolidated the confidence of global asset managers, who can now deploy large amounts of capital without significantly influencing market prices. The Emirates enter 2025 as an IPO powerhouse, bucking the global trend and attracting ever more capital to their changing economy.
The development of the bond and sukuk markets has followed the same dynamic as equities, providing the Emirates with a more comprehensive and resilient financing ecosystem. Bonds, whether conventional or Shariah-compliant, enable public and private issuers to diversify their sources of financing, while sukuks, based on tangible assets, attract investors concerned with Islamic compliance. In this way, Abu Dhabi and Dubai have established themselves as major debt centers, strengthening the Emirati financial center on the international stage.
In May 2022, the federal government launched its first sovereign bond issue in dirhams, via two-, three- and five-year securities, establishing a local yield curve and providing a benchmark for the domestic market. This initiative paved the way for corporate issuance: in January 2023, Emirates NBD placed AED 1 billion of three-year debt, becoming the first bank to borrow in local currency since the creation of the yield curve. At the same time, the government continued to solicit foreign capital: a ten-year AED 1.5 billion bond issued in July 2023 was oversubscribed more than four times and carried a coupon of 4.857%, just 60 basis points above the US Treasury.
The dollar-denominated bond segment remains predominant for Emirati companies; banks, airlines and sovereign holding companies have regularly issued Eurobonds with maturities of between 5 and 30 years, taking advantage of historically low rates before the recent rise in yields. These issues offer institutional investors an attractive risk/return profile, given the government's high rating (AA-) and the stability of the dirham pegged to the dollar.
On the sukuks front, Nasdaq Dubai has established itself as one of the world's leading marketplaces: the total face value of listed sukuks now exceeds USD 92.7 billion, while the total amount of listed debt securities approaches USD 136.2 billion following the addition of a USD 1 billion sukuk issued by Ras Al Khaimah in March 2025. This depth of market reflects the success of Islamic instruments, recently enhanced by green and sustainable sukuks, and longer maturities, up to 30 years or in perpetual form. Thanks to this bond/sukuk tandem, the Emirates now offer issuers a complete range of financing options, while consolidating their status as a global hub for traditional and Islamic capital.
Today, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) embody the UAE's vocation as a global financial hub, connecting the growing economies of the Middle East, Africa and South Asia (MEASA region) to the major centers of Europe, East Asia and the Americas. Over the past 15 years, the DIFC has established itself as a meeting place for investors and issuers from all horizons, facilitating capital flows within a privileged economic zone.
Benefiting from a strategic geographical position and a time zone that partially overlaps Asian sessions in the morning and European sessions in the afternoon, Dubai and Abu Dhabi offer a unique logistical and temporal relay. This configuration enables a manager based at the DIFC to talk to his counterparts in Singapore before joining the London markets without interruption, reinforcing the attractiveness of the Emirates as a hub for cross-border transaction processing.
The financial free zones of the DIFC and ADGM offer a legal framework based on English common law, virtually no taxation and independent English-speaking courts, creating an environment of trust for financial institutions: more than a thousand institutions have already set up in the DIFC and, at the end of June 2024, the ADGM had 112 fund management companies, an increase of 20.5% in one year. These autonomous structures attract international banks as well as fintech, hedge funds and family offices.
Since 2024, the flow of international asset managers has become spectacular: PGIM, the asset management division of Prudential Financial (USD 1,330 bn in assets under management), opened its first office in ADGM in September 2024 to get closer to local sovereign wealth funds and regional investors. Shortly afterwards, Nuveen (USD 1.2 bn in assets) chose Abu Dhabi to open its first office in the Middle East, confirming the growing emulation between the two emirates.
This growing presence of global players is reflected in the financial center rankings: according to the Global Financial Centres Index 2024, Dubai is ranked 16th worldwide (1st in MEA) and Abu Dhabi 35th (2nd in MEA), underlining their maturation as credible alternatives to established centers.
Against this backdrop, the United Arab Emirates offers a solid investment proposition: its state-of-the-art infrastructure, attractive regulatory framework and investor confidence in the resilience of its economy (particularly real estate, tourism and infrastructure) create an environment conducive to growth in assets under management and the emergence of new opportunities in the region. By bringing together Europe, Asia and Africa, Dubai and Abu Dhabi have established themselves as key crossroads for global capital.
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