UAE stock markets hit $1 trillion for the first time boosted by IPOs

UAE stock markets have hit $1 trillion in market capitalisation, primarily driven by initial public offerings as well as strong earnings, as the Arab world’s second-largest economy continues to grow amid diversification efforts.

The total market capitalisation of the two bourses that make the UAE market is bigger than Milan or Madrid, according to data compiled by Bloomberg. While dwarfed by the nearly $3 trillion Saudi Arabian Tadawul stock market, the UAE is larger than most emerging markets, barring a few like India and China, the data shows.

“The combined value of the UAE's stock markets has reached the significant milestone, with the Abu Dhabi Securities Exchange (ADX) contributing $801 billion and the Dubai Financial Market (DFM) adding $206 billion to this achievement,” George Pavel, general manager at brokerage firm Naga.com Middle East, said. “This growth has been driven by successful IPO activities, increased foreign investment inflows, and notably, strong corporate earnings across key sectors.”

There has been a flurry of listings in Dubai and Abu Dhabi in the last two years on the back of a push from the government to boost liquidity as well as growing investor demand. There are currently 100 firms listed on the ADX, while on DFM it is 68, according to data provided by the two bourses on Monday.

This month, Delivery Hero, the Germany-based food delivery platform, said it plans to list 15 per cent of its UAE subsidiary Talabat on the Dubai bourse in the fourth quarter to capitalise on the listing boom in the Emirates.

Its intention to list follows UAE retail major Lulu Group's successful IPO this month to raise Dh6.32 billion, the country's largest listing so far this year. The hypermarket chain operator priced its shares at the top of the indicated range amid strong investor demand.

Some of the other companies that listed in the UAE this year include ADNH Catering, a unit of Abu Dhabi National Hotels, which raised Dh864 million through the sale of a 40 per cent stake; NMDC Energy, a unit of Abu Dhabi contractor National Marine Dredging Company, which began trading on the ADX in September after raising $877 million; and Alef Education that raised $515 million from its IPO in Abu Dhabi in June.

“The UAE was at the forefront of all IPO activity in the GCC region in third quarter of 2024, raising a substantial $1.1 billion in IPO proceeds,” Vijay Valecha, chief investment officer at Century Financial, said. “As a result, the UAE accounted for 69 per cent of the total IPO capital raised in the GCC during the quarter. Saudi Arabia came in second place, raising $512 million, accounting for 31 per cent of the region’s total.”

The listing momentum is expected to continue next year with potential offerings from Etihad Airways and Alpha Data. "From airlines and retailers to food delivery companies and IT services firms – listings can be expected across the board spanning numerous sectors,” Mr Valecha said.

The strong performance of the UAE's economy amid the expansion of its non-oil sectors is also boosting stock markets. In September, the UAE Central Bank revised its 2024 gross domestic product growth forecast to 4 per cent from the previous estimate of 3.9 per cent in June.

In the first quarter, the country's economy expanded by 3.4 per cent, with real GDP reaching Dh430 billion, the Ministry of Economy said. The non-oil sector expanded by 4 per cent year on year during the quarter.

“The UAE's robust economic fundamentals underpin the positive outlook for its stock markets,” said Mr Pavel. “This strong macroeconomic backdrop, combined with a promising pipeline of new listings and continuous market reforms, positions both ADX and DFM for sustained growth."

The growing technology sector, which has been receiving a surge in investments, is also supporting the economy and the stock markets. Earlier this year, Microsoft announced a $1.5 billion investment in Abu Dhabi artificial intelligence and cloud company G42 to help it boost G42's global expansion plans. The Abu Dhabi-based technology company MGX, BlackRock, Microsoft and Global Infrastructure Partners have also launched an AI infrastructure investment partnership that aims to mobilise up to $100 billion to enhance the future of AI.

Local bourses have also recorded activity from the sector. Abu Dhabi-based blockchain and crypto solutions company Phoenix Group began trading on the ADX in December following a $370 million IPO. In October, Space42, the UAE-based AI-powered SpaceTech company created following the merger of Bayanat and Yahsat, made its trading debut on the ADX.

Overall, Emirates NBD, Emaar Properties, Emaar Development, Dubai Electricity and Water Authority are some of the biggest stocks on DFM, while for Abu Dhabi it is International Holding Company, First Abu Dhabi Bank, e&, Multiply, Alpha Dhabi and Aldar Properties.

"Dubai has been a star outperformer with many stocks including recently listed ones such as Dubai Taxi Company, Salik and Parkin making new highs," said Nishit Lakhotia, head of research at Manama based Sico.

"DFM is a major outperformer to all other GCC stock exchanges, including Tadawul. The outperformance is backed by strong macro drivers, company financial performance and future outlook. The momentum in the Emirates looks sustainable and can spill over to next year."

Pox that threatens the Middle East's native species

Camelpox

Caused by a virus related to the one that causes human smallpox, camelpox typically causes fever, swelling of lymph nodes and skin lesions in camels aged over three, but the animal usually recovers after a month or so. Younger animals may develop a more acute form that causes internal lesions and diarrhoea, and is often fatal, especially when secondary infections result. It is found across the Middle East as well as in parts of Asia, Africa, Russia and India.

Falconpox

Falconpox can cause a variety of types of lesions, which can affect, for example, the eyelids, feet and the areas above and below the beak. It is a problem among captive falcons and is one of many types of avian pox or avipox diseases that together affect dozens of bird species across the world. Among the other forms are pigeonpox, turkeypox, starlingpox and canarypox. Avipox viruses are spread by mosquitoes and direct bird-to-bird contact.

Houbarapox

Houbarapox is, like falconpox, one of the many forms of avipox diseases. It exists in various forms, with a type that causes skin lesions being least likely to result in death. Other forms cause more severe lesions, including internal lesions, and are more likely to kill the bird, often because secondary infections develop. This summer the CVRL reported an outbreak of pox in houbaras after rains in spring led to an increase in mosquito numbers.

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry

Rating: 2/5

Generation Start-up: Awok company profile

Started: 2013

Founder: Ulugbek Yuldashev

Sector: e-commerce

Size: 600 plus

Stage: still in talks with VCs

Principal Investors: self-financed by founder

Cultural fiesta

What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.

ALL THE RESULTS

Bantamweight

Siyovush Gulmomdov (TJK) bt Rey Nacionales (PHI) by decision.

Lightweight

Alexandru Chitoran (ROU) bt Hussein Fakhir Abed (SYR) by submission.

Catch 74kg

Omar Hussein (JOR) bt Tohir Zhuraev (TJK) by decision.

Strawweight (Female)

Seo Ye-dam (KOR) bt Weronika Zygmunt (POL) by decision.

Featherweight

Kaan Ofli (TUR) bt Walid Laidi (ALG) by TKO.

Lightweight

Abdulla Al Bousheiri (KUW) bt Leandro Martins (BRA) by TKO.

Welterweight

Ahmad Labban (LEB) bt Sofiane Benchohra (ALG) by TKO.

Bantamweight

Jaures Dea (CAM) v Nawras Abzakh (JOR) no contest.

Lightweight

Mohammed Yahya (UAE) bt Glen Ranillo (PHI) by TKO round 1.

Lightweight

Alan Omer (GER) bt Aidan Aguilera (AUS) by TKO round 1.

Welterweight

Mounir Lazzez (TUN) bt Sasha Palatkinov (HKG) by TKO round 1.

Featherweight title bout

Romando Dy (PHI) v Lee Do-gyeom (KOR) by KO round 1.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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