Today's Edition
BATOOL GHAITH (ABU DHABI)
While the Middle East navigated a turbulent period, foreign investors continued to pour capital into the UAE markets at record levels.
Foreign investors drove UAE equities to a three-month high in June, with trading activity on the Abu Dhabi Securities Exchange (ADX) surging 22% year-on-year and Dubai Financial Market (DFM) crossing Dh1 trillion in market capitalisation, according to eToro.
Analysts emphasised that global investors continue to view the UAE as one of the most resilient investment hubs.
On the ADX, foreign investor trading reached Dh299 billion in 2025, up 13.8% from 2024 and representing around 39% of total trading value.
That momentum carried into 2026. During the first four months of the year, foreign investors accounted for 47.3% of total trading value, amounting to Dh111 billion, while ADX market capitalisation stood at Dh2.83 trillion at the end of April.
Dr Wissam El Khoury, Associate Dean of the School of Business at the American University in Dubai and a wealth and investment consultant, noted that since the ADX entered the MSCI Emerging Markets Index in 2014, cumulative foreign net investment has exceeded Dh134 billion, and the exchange now ranks among the world’s top 20 by market capitalisation.
Speaking to Aletihad, Dr El Khoury said the sustained increase in foreign participation in the UAE suggests that international investors increasingly view the country as a market characterised by institutional stability, policy credibility, and long-term investment opportunities.
“It reflects the UAE’s institutional stability, its dollar-pegged currency, open foreign ownership, and membership of the MSCI and FTSE Russell emerging-market indices, which channel global benchmark capital automatically,” he explained.
According to eToro, the breakthrough agreement between the US and Iran drove the DFM General Index up approximately 9% and the FTSE ADX General Index around 6% from the point of the announcement.
Dr El Khoury emphasised that improving regional conditions helped the UAE’s equity markets remain well supported.
“The fundamental investment case for UAE equities is strengthening as regional risk premia decline, and investors refocus on corporate earnings, dividend distributions, and the country’s long-term growth prospects,” he said.
Participation from investors across the United States, the United Kingdom, and Asia has been sustained throughout the period of tension, alongside continued capital rotation within the GCC, Razan Hilal, CMT and Market Analyst at Forex.com, told Aletihad.
She emphasised that the latest figures reflect continued confidence from international institutional investors. The clearest expression of returning confidence has been in banks, as they led the recent recovery, Hilal indicated.
Abu Dhabi Commercial Bank has recovered more than 29% from its 2026 lows, while Abu Dhabi Islamic Bank has gained more than 19%, Emirates NBD more than 18%, and First Abu Dhabi Bank around 14%.
“High institutional participation has supported a stable technical structure, allowing the market to absorb volatility and limit extreme drawdowns,” Hilal said.
She pointed out that real estate has also recovered, with Aldar and Emaar both rebounding more than 14% from conflict-related lows. Additionally, she noted that the MSCI UAE Index has climbed more than 10% from its yearly lows and remains in a broader uptrend established in 2023.
She emphasised that banks are expected to continue leading the market, while real estate and tourism could extend their recovery. On the other hand, Hilal noted that energy stocks’ performance will remain influenced by oil prices, which have recently corrected toward the $70 mark.
“While rising oversupply risks could keep oil volatility elevated into year-end, the UAE’s continued economic diversification, particularly into technology and AI, is expected to help support broader equity market resilience,” she said.
Dr El Khoury pointed to the structural foundations underpinning that resilience, noting that Abu Dhabi’s market is anchored by sectors that have historically held firm during volatility, such as banks, energy, telecoms, infrastructure, logistics, and technology-linked companies.
In any environment, international investors favour markets with policy credibility, deep liquidity, strong balance sheets, and visible earnings, and the UAE continues to distinguish itself on all four dimensions, he said. ADX-listed companies reinforced the point with first-quarter 2026 profits of Dh48 billion, up 17% year-on-year.
According to Dr El Khoury, the UAE’s artificial intelligence ambitions can support a structural re-rating of its equity markets in the coming years, as these investments translate into higher corporate revenues, productivity gains, and sustainable earnings growth.
The scale of commitment is already significant, he said, pointing to Stargate UAE, a one-gigawatt AI compute cluster in Abu Dhabi led by G42 with OpenAI, Oracle, Nvidia, Cisco, and SoftBank.
The financing ecosystem is equally deep, he added, as Abu Dhabi’s MGX, together with BlackRock, Global Infrastructure Partners, and Microsoft, launched a partnership to invest up to $100 billion in AI infrastructure, while Microsoft’s total UAE commitment from 2023 to 2029 has reached $15.2 billion.
“For capital markets, the significance extends well beyond technology. Large-scale AI investment has the potential to create entirely new listed industries, deepen market liquidity, broaden sector representation, and attract a new generation of international institutional investors seeking exposure to the global digital economy,” Dr El Khoury said.
