Driven by the robust performances of consumer-related and real estate equities, the Dubai stock market recently hit an eight-year high, amid the expectations of new listings, and a positive economic outlook despite headwinds to the global economy.
Analysts now believe that the market will continue to perform strongly moving forward, on the strength of high oil prices, the expansion of the Chinese economy, and new public and private initial public offers (IPOs) that are likely to be listed in the coming months.
Since January 2023, the local market has grown by almost 25%, outpacing both the S&P 500 index and the MSCI All Country World Index, which have grown by about 20% and 16%, respectively.
On July 14, 2023, the Dubai Financial Market General Index (DFMGI) crossed the 4,000 mark, marking its highest closing price since December 2015.
The Dubai stock market may stabilise after experiencing some price corrections, according to Ahmed Negm, head of market research Mena at XS.com, and solid domestic fundamentals may support an increase in the main index.
“Traders could, however, remain cautious ahead of the Federal Reserve’s meeting in the middle of next week,” Negm commented, while interacting with the Khaleej Times.
According to Century Financial’s chief investment officer, Vijay Valecha, the recent surge was fuelled by a positive macroeconomic outlook brought on by an increase in real estate and tourism activity.
“New listings, particularly those of government and semi-government entities as well as private family-owned businesses going public, propelled overall momentum in the markets. As a result, the UAE recorded $3 billion listing proceeds in Q1 2023 – the third highest in the world,” he said.
According to sources cited by Reuters, the Roads and Transport Authority Dubai plans to launch the Dubai Taxi Corporation’s initial public offering (IPO) in December or January 2024, and has asked investment banks to compete for the positions.
According to Valecha, the market capitalization increased to Dh566.4 billion in 2023 alone as 81% of the companies experienced favourable share price growth.
Meanwhile, adding more fuel to the positive outlook around the Dubai stock market, the Emirati city now has the world’s strongest luxury property market, and the trajectory is expected to continue, stated an industry expert.
“Traditional branding has involved hospitality and fashion brands collaborating with property developers and we are already seeing watchmakers and automotive brands coming into the fold. We expect the future to bring wellness, technology and others to also collaborate and bring unique lifestyle offerings to the market,” Shreen R Gupta, CEO & Partner Grid Properties said.