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UAE stock market cap expected to increase by Dh1 trillion in 4 years
IPO activity in the country is set to match last year’s performance in 2025, says analyst
- PUBLISHED: Mon 17 Feb 2025, 5:29 PM
- By:
- Waheed Abbas
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The UAE stock market capitalisation is expected to grow by Dh1 trillion over the next four years, driven by new initial public offerings (IPOs) which will hit the Dubai and Abu Dhabi bourses from the government and private sector entities, analysts said.
“In the last four years, almost Dh1 trillion has been added to the UAE market cap through the new IPOs. Over the next four years, we see UAE markets possibly adding the same because the UAE is now playing catch up with a combination of government entities along with private sector companies coming to IPO with the broadening of the sectors,” Anita Krishna Gupta, consultant equity strategy, Chief Investment Office, Wealth Management, Emirates NBD Bank, told Khaleej Times in an interview on Monday.
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Gupta said the UAE is ranked 15th globally in terms of market cap.
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She added that government and stock markets are encouraging private companies to sell their shares and list on the local markets.
IPO market same as last year
Analysts at Emirates NBD expect the IPO market will match last year’s performance.
Dubai government has announced that it will float 10 entities on the Dubai Financial Market in order to push market capitalisation of the local market to Dh3 trillion.
The UAE has seen a good number of public and private sector companies tapping the local markets to raise funds for growth and expansion. In 2024, six out of the 10 largest IPOs in the Gulf Cooperation Council (GCC) region were from the UAE, led by Talabat ($2 billion), Lulu Retail ($1.72 billion), NMDC Energy ($877 million), Alef Education ($515 million), Parkin ($429 million) and Spinneys 1961 Holding ($375 million).
IT firm Alpha Data was the first firm to announce its intention to go public in 2025, floating a 40 per cent equity stake on the Abu Dhabi Securities Exchange.
All the IPO have seen strong demand as they were oversubscribed multiple times, reflecting a strong appetite for IPOs in the UAE among retail and institutional investors.
Gupta sees some interesting IPOs from the real estate and technology front will be floated this year on the Dubai and Abu Dhabi bourses.
“We are expecting more government entities from Dubai to come to the market. And again, in Abu Dhabi, we are expecting more on the technology front. So 2025 is going to probably match IPO issuances of 2024, which was a stellar year for IPO issues.”
UAE – a dividend haven
She added that the UAE has been a ‘dividend heaven’ as the listed firms paid out their shareholders very well.
“The UAE market is also a dividend-driven story…. Some of the best-performing names in the last couple of years have seen a competitive increase in dividends, including Emaar Group’s increased dividends has done extremely well,” she added.
The Securities and Commodities Authority (SCA) reported that public joint-stock companies in the UAE distributed a total of Dh61.73 billion in cash dividends and bonus shares during 2023.
