Non-Arab investments in UAE’s financial markets reach Dh12.5 billion in 2019

The level of net investments by non-Arab foreigners is the highest in five years

The net investments of non-Arab foreign investors in the UAE’s financial markets increased 11-fold in 2019 to reach Dh12.5 billion.

The level invested by the segment in the Dubai and Abu Dhabi markets was the highest in five years, state news agency Wam reported on Wednesday, citing official statistics.

Foreign investors in the UAE’s financial markets are classified into three categories - Gulf Cooperation Council (GCC) citizens, investors from other Arab nations and non-Arab investors.

Official statistics also pointed out a significant increase in the value of shares traded by foreign investors on the Abu Dhabi and Dubai exchanges in 2019. Some Dh218bn of shares were traded by foreigners, an increase of 20.4 per cent on the previous year.

The total foreign investors' trading share in the Abu Dhabi Securities Exchange amounted to Dh112.75bn in 2019, with net investments of non-Arabs standing at Dh9.54bn.

Foreign investors also traded Dh105.4bn of stocks on the Dubai Financial Market, with net investments totalling Dh2.98bn at the end of 2019.

Both UAE markets closed higher in 2019. The Abu Dhabi market was up 3.27 per cent over the course of the year, closing at 5,075.77 on New Year's Eve. The Dubai Financial Market was one of the stronger performers of the main Gulf bourses, closing 9.3 per cent higher over the course of the year at 2,764.86.

UAE markets were upgraded to emerging market status by index compiler MSCI in 2013, leading to greater long-term capital flow from both active and passive foreign investors.

The Securities and Commodities Authority (SCA) is also adopting new systems to attract more capital into the financial markets.

Earlier this year, the SCA sought industry and stakeholder feedback on the regulation of cryptocurrencies in the country, a move expected to further develop digital currency markets in the Arab world’s second-biggest economy.

The regulations will encompass all aspects of the crypto asset industry in the UAE ranging from token issuance requirements to trading and safekeeping practices, with an emphasis on protecting investor interests. It will also include financial crime prevention measures, information security controls and technology governance norms.

Abu Dhabi Global Market's Financial Services Regulatory Authority, the regulatory body overseeing the emirate's financial free zone, also gave in-principle approval for three cryptocurrency exchanges to operate from the centre.