Institutional investors have notably boosted their acquisition of domestic stocks in 2023, enticed by the diverse investment prospects and the opportunity to engage in the strong expansion of the country’s economy. Furthermore, prominent global and regional institutions consider local listed companies highly attractive for their investment strategies.
Data from the Abu Dhabi and Dubai markets reveals that institutional investors achieved a net purchase of nearly Dh7 billion in local stocks from January to December 2023. This figure reflects a total purchase of Dh302.7 billion compared to total sales of approximately Dh295.8 billion.
The substantial rise in institutional investment in local equities underscores strong confidence in UAE markets, their promising future growth prospects, and the attractive investment opportunities they offer due to the country’s solid economic foundations and the impressive performance of its operating companies. This surge in institutional interest coincides with ongoing efforts by the markets to attract more foreign and institutional investments, aiming to diversify liquidity across local, foreign, institutional, and individual investors.
Institutional investors dominated the UAE equity market in 2023, capturing nearly 78 per cent of total trading activity. This significant buy-in from institutional players demonstrates their heightened confidence in the UAE’s economic prospects, driven by the diversification of investment opportunities and compelling performance of listed national companies.
In the Abu Dhabi Securities Exchange (ADX), institutional investors achieved a net investment exceeding Dh6.1 billion year-to-date. This robust appetite was fuelled by cumulative purchases of Dh253.9 billion, marginally exceeding sales of Dh247.8 billion.
The highest net purchase value in the ADX was recorded in February, reaching approximately Dh2.3 billion, followed by Dh100.3 million in January, Dh1.02 billion in March, Dh587.1 million in April, Dh566.7 million in May, Dh680 million in June, Dh759.8 million in July, Dh187.04 million in August, Dh293.3 million in September, Dh132.4 million in October, and Dh254.9 million in November.
In the Dubai Financial Market, institutional investment achieved a net purchase value of Dh808.1 million.
The local financial markets expect increased institutional investments in the upcoming months. This is 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 country’s financial markets are collaborating with listed companies and international investment banks to host global investor conferences. The goal is to bolster connections, review business advancements, and discuss growth strategies with global investment institutions. This effort ensures open communication channels, sustaining a strong presence of institutional and foreign investments in the markets.