ADX will continue to attract global investors amid new listings, JP Morgan says

The stock market will remain a premium market from an operating standpoint, according to senior executive Alok Gupte

A number of companies have listed their shares on the Abu Dhabi Securities Exchange in the last two years. Photo: ADX
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Abu Dhabi Securities Exchange (ADX) will continue to attract the attention of international investors as the Arab world’s second-largest bourse focuses on new listings, according to a top executive from JP Morgan.

“When you look at the strong stable of companies, which are actually high class, world-class companies which are coming to the ADX market to list, we think there is going to be an increased focus from international investors and there is plenty to go in terms of getting that global attention to the ADX,” Aloke Gupte, JP Morgan's head of Europe, Middle East and Africa equity capital markets, said at Abu Dhabi Finance Week on Monday.

New listings have continued to increase on the Abu Dhabi stock market in the last two years as the economy recovers from the coronavirus pandemic. There were nine listings on the ADX last year, including Adnoc Drilling, Fertiglobe and satellite operator Yahsat.

Abu Dhabi Ports Group, Borouge, Burjeel Holdings and Bayanat, a geospatial data products and services provider, have listed on the stock market this year.

“Abu Dhabi exchange has increased its liquidity in the last two years eight times … and in terms of stable, targeted, strategic governance and regulatory framework … I don’t think anyone is doing as good a job,” Mr Gupte said.

The stock market “will remain a premium market from an operating standpoint, but it also has a perfect mix. You have a great set of companies and you have a deep local pool of demand, which is now accentuated by the setting up of the IPO fund”, he added.

Last year, Abu Dhabi launched a Dh5 billion ($1.4bn) IPO Fund to help encourage and support private companies to list on the local stock market.

The fund has shortlisted six private sector companies to potentially receive investment and advisory services for listing their shares on the stock market, Mohamed Al Shorafa, chairman of the Abu Dhabi Department of Economic Development, said on Monday.

The UAE’s component of the MSCI index has tripled in 18 months and a lot of that is led by ADX and “there is really more room to grow”, according to Mr Gupte.

“This year has been a year when you see naturally outflows from the emerging markets, but the ADX has seen almost $3bn dollars of inflows from overseas and this is not including the IPOs,” he said.

IPOs have propelled the market value of the ADX to Dh2.5 trillion, as of the close of trading on Monday.

First Abu Dhabi Bank, the UAE’s largest lender by assets, as well as Aldar Properties, e&, formerly known as Etisalat, International Holding Company and Adnoc Distribution are other big companies listed on the stock market.

Updated: November 15, 2022, 3:30 AM
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