Shares in Alpha Dhabi, the investment group listed on the Abu Dhabi Securities Exchange on Sunday, closed up by about 13 per cent on Monday, making it the fourth-biggest company on the exchange.
The company, in which Integrated Holding Company and Infinity Wave Holding each own a 44 per cent stake, was valued at Dh169 billion ($46bn) at Monday's closing price of Dh16.90 a share.
That means only IHC itself (Dh208.7bn), Etisalat (Dh193.1bn) and First Abu Dhabi Bank (Dh178bn) have a higher market capitalisation.
IHC's shares also gained another 3.4 per cent to Dh114.60, pushing the ADX's main market index up 0.63 per cent and its market capitalisation to Dh1.15 trillion ($313.1bn).
In the year to date, the Abu Dhabi market is the best performer in the Gulf and "among the best globally", gaining 33.8 per cent, said Devesh Mamtani, chief market strategist at Dubai-based broker Century Financial.
The presence of bigger companies has helped to attract interest from foreign investors, with a number of privately held entities owned by state holding company ADQ merging with publicly listed businesses to grow the market.
That includes Abu Dhabi National Energy Company'smerger with Abu Dhabi Power Corporation, National Marine Dredging Company's combination with National Petroluem Construction Company and Agthia's acquisition of dates company Al Foah.
Other deals have also been announced to combine ADQ's Abu Dhabi National Exhibitions Company with Abu Dhabi National Hotels and Emirates Steel with Arkan Building Materials.
"Abu Dhabi has decided to create prominent national champions in various sectors like banking, utilities, dredging, shipbuilding, etc, which can compete globally," said Mr Mamtani.
ADQ-owned ADX is also improving governance standards by insisting companies' management teams provide discussion and analysis of performance alongside quarterly results, he said.
Over a 12-month period, the ADX's main market index is up 56 per cent, outperforming regional peers such as Saudi Arabia's Tadawul, which has gained 51 per cent, Qatar's All Share index that is up 19 per cent and Egypt's EGX 30 that is down 5 per cent, said Ullas Rao, assistant professor of finance at Heriot-Watt University Dubai.
IHC's growth has been one of the main contributors, with its shares "generating close to an eye-popping 300 per cent return" over the past year, Mr Rao said.
ADX is also expected to benefit from several other listings, with Al Yah Satellite Communications' initial public offering already scheduled for July 14.
"The IPO momentum is expected to gain traction in the second half of the year, thanks in part to the resurgence in the UAE economy, buoyed by a recovery on the back of diminishing pandemic-related disruptions," Mr Rao said.
"[A] strong economy led by booming stock markets provides much-needed impetus for businesses to raise capital for long-term investments."
