UAE’s net institutional investment in stock markets hit $9.1bn

Foreign and regional institutional investors have led a significant surge in net stock purchases, amounting to 7 billion dirhams ($1.91 billion) year-to-date in the Abu Dhabi and Dubai markets.

Demonstrating sustained interest in locally listed firms, this figure reflects a total purchase of 302.7 billion dirhams compared to total sales of approximately 295.8 billion dirhams.

According to a report published by state news agency WAM, institutional investors boosted their acquisition of domestic stocks in 2023 due to diverse investment prospects and the opportunity to engage in the strong expansion of the UAE’s economy.

The report further noted that institutional investors dominated the UAE equity market in 2023, capturing nearly 78 percent of total trading activity.

In the Abu Dhabi Securities Exchange, institutional investors achieved a net investment exceeding 6.1 billion dirhams year-to-date, fueled by cumulative purchases of 253.9 billion dirhams, which marginally exceeded sales of 247.8 billion dirhams.

Citing data from the stock market, WAM reported that the highest net purchase value in the ADX was recorded in February, reaching approximately 2.3 billion dirhams, followed by 1.02 billion dirhams in March and 566.7 million dirhams in April.

In the Dubai Financial Market, institutional investments reached 808.1 million dirhams year-to-date.

The local financial markets expect increased institutional investments in the upcoming months 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 report added.

Earlier in November, ADX and HSBC Bank Middle East Ltd. had partnered to introduce digital fixed-income securities to the region’s capital markets.

According to a press statement, this initiative is expected to capitalize on ADX’s expertise in investment products as the fastest-growing exchange in the Middle East region.

Digital bonds are financial instruments managed using blockchain and smart contract technology to streamline operations in capital markets.

ADX is the second largest market in the Arab region, next to Saudi Arabia’s Tadawul All Share Index, and its strategy of providing stable financial performance with diversified sources of income aligns with the guiding principles of the UAE’s “Towards the next 50” agenda.