UAE market cap increases as top 16 companies hit Dhs2.7 trillion

As of January 2024, the aggregate market capitalisation of the top 16 national companies listed on local exchanges stood at Dhs2.7 trillion.  Driven by planned market expansions and existing valuations exceeding Dhs3.6 trillion, this figure is anticipated to experience significant growth, potentially reaching Dhs6 trillion in the coming years.

According to official figures, 16 listed companies accounted for about 74 per cent, or Dhs2.709 trillion, of the total market capitalisation of the local stock markets, which was Dhs3.656 trillion at the close of trading yesterday.

International Holding Company (IHC) came in first place with a market capitalisation of more than Dhs897.5 billion, equivalent to 24.5 per cent of the market capitalisation of the local markets, followed by Abu Dhabi National Energy Company (Taqa) with a market capitalisation of more than Dhs369.9 billion and a share of 10.1 per cent; then Adnoc Gas with about Dhs238.6 billion, representing 6.5 per cent of the total market capitalisation of the local markets.

The market value of Alpha Dhabi Holding reached about Dhs187.2 billion, equivalent to a share of about 5.12 per cent, followed by Etisalat by e& with a market value of Dhs169 billion and a share of 4.62 per cent; then First Abu Dhabi Bank (FAB) with Dhs153.3 billion in market value, equivalent to 4.2 per cent; then Dubai Electricity and Water Authority (Dewa) with Dhs124.5 billion; and Emirates NBD with more than Dhs110.5 billion.

The market value of Borouge amounted to more than Dhs74.5 billion; Emaar Properties Dhs68.1 billion; Abu Dhabi Commercial Bank Dhs64.6 billion; PureHealth Holdings Dhs62 billion; Adnoc Drilling Dhs60 billion; Adnoc Distribution Dhs45.7 billion; Dubai Islamic Bank Dhs41.7 billion; and Aldar Properties Dhs41.6 billion.

The market value of the local stock markets significantly strengthened in the past year, primarily supported by the strength and resilience of the national economy, along with strong gains by listed stocks, increased demand from international investors, and new listings.

The new listings included Adnoc Gas, Presight AI, Al Ansari Financial Services, Adnoc Logistics, Dubai Taxi, Investcorp Capital, Phoenix Group, and PureHealth.

The market value of listed stocks gained over Dhs444.5 billion in the past year of 2023, increasing the market capitalisation from Dhs3.206 trillion at the end of 2022 to Dhs3.651 trillion by the end of 2023, distributed as Dhs2.963 trillion for the Abu Dhabi Securities Exchange and Dhs687.5 billion for the Dubai Financial Market.

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 Dhs7 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 Dhs295.8 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 per cent 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 Dhs6.1 billion year-to-date. This robust appetite was fuelled by cumulative purchases of Dhs253.9 billion, marginally exceeding sales of Dhs247.8 billion.

The highest net purchase value in the ADX was recorded in February, reaching approximately Dhs2.3 billion, followed by Dhs100.3 million in January, Dhs 1.02 billion in March, Dhs587.1 million in April, Dhs566.7 million in May, Dhs680 million in June, Dhs759.8 million in July, Dhs 187.04 million in August, Dhs293.3 million in September, Dhs132.4 million in October, and Dhs 254.9 million in November.

In the Dubai Financial Market, institutional investment achieved a net purchase value of Dhs808.1 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.