UAE Capital Markets: Trends, Foreign Inflows & Institutional Growth (2025–2028)

Overview of the UAE Financial Markets

The financial markets of the United Arab Emirates (UAE) are regarded as one of the most advanced and well-structured financial systems in the Middle East and North Africa (MENA) region. These markets not only play a key role in financing both the private and public sectors, but due to open policies, transparent regulatory frameworks, and a diversity of financial instruments, they have also become one of the most attractive investment destinations for both domestic and international investors.

At Dar Al Tharwa, we have prepared a detailed overview of these markets and their general conditions for you. Before entering the markets, this comprehensive research.especially focused on Dubai and its financial markets.will likely provide you with valuable insights. Our analysis and foresight team at Dar Al Tharwa has incorporated financial expertise throughout this study to help you achieve the best outcomes. The investment opportunities presented in this report can serve as a guide for anyone seeking to work in Dubai and build wealth among the world’s highest classes.

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Key Institutions of the UAE Capital Market

× Dubai Financial Market (DFM)
Established in 2000, the Dubai Financial Market was the first stock exchange in the UAE. It operates as a public joint-stock company under the supervision of the Securities and Commodities Authority (SCA). DFM mainly focuses on domestic and regional companies, with a high volume of daily stock trading.

× Abu Dhabi Securities Exchange (ADX)
Also established in 2000, ADX centers on larger and more structured companies based in Abu Dhabi. In recent years, due to large initial public offerings (IPOs) and growth in trading volume, ADX has become one of the most stable markets in the region. Data from 2024 shows that the market capitalization of ADX exceeded AED 2 trillion, reflecting its depth and stability for institutional investors.

× NASDAQ Dubai
Located in the Dubai International Financial Centre (DIFC), this exchange focuses primarily on international financial instruments, derivatives, sukuk (Islamic bonds), and cross-border companies. Unlike DFM and ADX, NASDAQ Dubai is regulated directly by the Dubai Financial Services Authority (DFSA), offering a high level of transparency and compliance with international standards. It provides a strong platform for foreign investors and multinational corporations.

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Structural Features of the UAE Financial Market

Diversity of Participants and Instruments: From retail investors to global financial institutions, the market offers a wide range of instruments including equities, bonds, sukuk, derivatives, and ETFs.

Regulatory Transparency: Dual regulation by the SCA (for DFM and ADX) and the DFSA (for NASDAQ Dubai) enhances investor confidence.

Foreign Investment Attraction: Advantages include 100% foreign ownership in many sectors, financial free zones, and zero capital gains tax.

FinTech Infrastructure: The UAE markets utilize advanced technologies such as online trading platforms, blockchain, and integrated APIs, enhancing both market speed and accessibility.

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Current Market Status and Key Trends in the UAE Capital Market

• Market Index Performance (as of H1 2025):

• ADX General Index recorded growth of over 11.4% since the beginning of the year, reaching around 9,930 points.
  
  
• DFM General Index rose approximately 8.2%, reaching 4,280 points.
  
  
• The combined market capitalization of listed companies on ADX surpassed AED 2.4 trillion (USD 650 billion), while DFM’s market cap stood at about AED 688 billion (USD 190 billion).
  
  

This sustained growth reflects new capital inflows and high investor confidence in the UAE economy, particularly after foreign ownership reforms and successful IPOs.

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Trading Volume and Market Liquidity

• The average daily trading value on ADX during the first half of 2025 reached AED 1.1 billion, while DFM’s average stood at about AED 520 million.
  
  

NASDAQ Dubai also experienced significant growth through increased issuance of sukuk and debt instruments, particularly by sovereign entities such as Dubai Islamic Bank.

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Growth of Foreign Investors

• In 2024, net foreign capital inflows into UAE stock exchanges exceeded AED 19 billion.
  
  
• Foreign investors accounted for 32% of trading on DFM and 26% on ADX.
  
  

Attraction factors include: full foreign ownership rights, tax exemptions, strong credit rating (Aa2 by Moody’s), and stable macroeconomic policies.

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Initial Public Offerings (IPOs) and Primary Market Development

Between 2022 and 2024, the UAE was one of the most active countries in the region in terms of IPO activity. The most notable offerings include:

• DEWA (Dubai Electricity and Water Authority): The largest IPO in Dubai’s history in 2022, with an initial market value of AED 22.3 billion.
  
  
• ADNOC Gas and ADNOC Logistics & Services: Two major Abu Dhabi offerings in 2023 and 2024 that attracted billions of dollars in capital.
  
  
• Parkin and Dubai Taxi Corporation: Successful government IPOs in 2024 with high foreign investor participation.
  
  

Privatization policies and public offerings of state assets have not only provided new financial resources but also increased market liquidity and created new opportunities for investors.

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Key Trends in Market Behavior and Infrastructure

× Digitalization and FinTech Transformation:
Both ADX and DFM have developed digital trading platforms and real-time analytics tools. Mobile applications, API connectivity to brokers, and algorithmic trading are expanding. Projects such as the ADX Sahmi App and DFM Smart Investor serve as digital infrastructures attracting younger, tech-savvy investors.

× Growth of ESG and Sustainable Investments:
With national targets like UAE Net Zero by 2050 and hosting COP28, the UAE is transforming its financial market into a sustainable and environmentally-friendly platform. In 2024, over 13% of total investment value went into ESG-focused ETFs and passive funds. The issuance of green sukuk and sustainable bonds by banks and government entities is on the rise.

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Regulatory Reforms and Trends

• 100% foreign ownership is now allowed for many companies operating in free zones or listed on the exchanges.
  
  
• Alignment with international financial reporting standards (IFRS) has been implemented across all markets.
  
  

Licensing procedures for foreign investment companies are being streamlined.