Institutional investors achieve net purchase of Dhs7b in local stocks
- 25 Dec 2023
Institutional investors have notably boosted their acquisition of domestic stocks in 2023, enticed by the diverse investment prospects and the opportunity to engage in the strong expansion of the country’s economy. Furthermore, prominent global and regional institutions consider local listed companies highly attractive for their investment strategies.
Data from the Abu Dhabi and Dubai markets reveals that institutional investors achieved a net purchase of nearly Dhs 7 billion ($1.9 billion) in local stocks from January to December 2023. This figure reflects a total purchase of Dhs 302.7 billion compared to total sales of approximately Dhs 295.8 billion.
The substantial rise in institutional investment in local equities underscores strong confidence in UAE markets, their promising future growth prospects, and the attractive investment opportunities they offer due to the country’s solid economic foundations and the impressive performance of its operating companies. This surge in institutional interest coincides with ongoing efforts by the markets to attract more foreign and institutional investments, aiming to diversify liquidity across local, foreign, institutional, and individual investors.
Institutional investors dominated the UAE equity market in 2023, capturing nearly 78 percent of total trading activity. This significant buy-in from institutional players demonstrates their heightened confidence in the UAE’s economic prospects, driven by the diversification of investment opportunities and compelling performance of listed national companies.
In the Abu Dhabi Securities Exchange (ADX), institutional investors achieved a net investment exceeding Dhs 6.1 billion year-to-date. This robust appetite was fuelled by cumulative purchases of Dhs 253.9 billion, marginally exceeding sales of Dhs 247.8 billion.
The highest net purchase value in the ADX was recorded in February, reaching approximately Dhs 2.3 billion, followed by Dhs100.3 million in January, Dhs 1.02 billion in March, Dhs 587.1 million in April, Dhs 566.7 million in May, Dhs 680 million in June, Dhs 759.8 million in July, Dhs 187.04 million in August, Dhs293.3 million in September, Dhs 132.4 million in October, and Dhs 254.9 million in November.
In the Dubai Financial Market, institutional investment achieved a net purchase value of AED808.1 million.
The local financial markets expect increased institutional investments in the upcoming months. This is due to the numerous investment opportunities available in shares of financially stable companies, which are trading at appealing price levels for both local and foreign portfolios.
The country’s financial markets are collaborating with listed companies and international investment banks to host global investor conferences. The goal is to bolster connections, review business advancements, and discuss growth strategies with global investment institutions. This effort ensures open communication channels, sustaining a strong presence of institutional and foreign investments in the markets.
Daniel Takieddine CEO MENA at BDSwiss told Gulf Today that GCC stock markets recorded mixed performances with strong gains in Saudi Arabia. While some caution could remain with the year coming to an end, expectations of softer monetary policy could continue to boost sentiment among investors.
“The Dubai stock market opened the week with limited movements and remained within the trading of the last few days. The market could be exposed to some price correction risks after a small rebound.”
“The Abu Dhabi stock market recorded some volatility today but continued to trade sideways overall and remained within a limited trading range. The market could see some risk of losses if oil prices return to the downside.”
“The Qatari stock market continued to improve, extending gains of the last few days. However, the market could turn to price corrections if traders move to secure their gains. Uncertainty regarding the developments in energy markets could also remain a source of risks.”
“The Saudi stock market recorded a strong performance, recovering from its price correction last week, and could continue to move toward its previous peak. At the same time, traders could continue to monitor oil markets and their impact on sentiment and on the local economy.”
Meanwhile, CFI, MENA’s leading broker with a legacy of innovation for more than 25 years, has been at the forefront of AI technology in 2023. Committing to using artificial intelligence to empower traders, CFI has been fiercely implementing new technology to their operations.
Announcing an AI-based trading automation tool, Capitalise AI, earlier this year that helps traders automate strategies without the need to have development skills, CFI now announced launching their own development of AI Trading Assistant, available now in Beta version in its own app. The company is on a path to revolutionise the way online trading works by adopting new innovative ways and tools to solve the biggest pains of the traders: risk management, emotion control, access to simplified information and automation as much as possible. The AI Assistant is meant to also serve the Trader as its companion, implementing a various range of needs from getting the latest analysis to submitting requests such as withdrawal, leverage change and ultimately all what the traders will need.
