Institutional investors significantly increased their acquisition of domestic stocks throughout 2023, drawn by diverse investment prospects and the robust expansion of the country’s economy. The attraction toward locally listed companies for investment strategies has garnered attention from notable global and regional institutions.
Data compiled from the Abu Dhabi and Dubai markets indicates that institutional investors accumulated a net purchase of nearly Dh7 billion ($1.9 billion) in local stocks between January and December 2023. This figure reflects total purchases amounting to Dh302.7 billion against sales totalling approximately Dh295.8 billion.
The surge in institutional investment in local equities underscores substantial confidence in UAE markets, driven by promising future growth prospects and attractive investment opportunities stemming from the country’s sturdy economic foundations and the commendable performance of its operating companies. This upswing in institutional interest aligns with ongoing market efforts to attract more foreign and institutional investments, aiming to diversify liquidity among local, foreign, institutional, and individual investors.
Institutional investors
Institutional investors dominated the UAE equity market throughout 2023, accounting for nearly 78% of total trading activity. This substantial engagement from institutional players signifies heightened confidence in the UAE’s economic outlook, backed by diverse investment opportunities and the strong performance of listed national companies.
At the Abu Dhabi Securities Exchange (ADX), institutional investors attained a net investment exceeding Dh6.1 billion year-to-date. Their robust involvement was fuelled by cumulative purchases of Dh253.9 billion, slightly surpassing sales of Dh247.8 billion.
The highest net purchase value in the ADX was recorded in February at 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.
Meanwhile, institutional investment in the Dubai Financial Market resulted in a net purchase value of Dh808.1 million.
Investment opportunities
Anticipating an upsurge in institutional investments in the forthcoming months, local financial markets highlight numerous investment opportunities in shares of financially stable companies, trading at attractive price levels for local and foreign portfolios.
The country’s financial markets collaborate with listed companies and international investment banks to conduct global investor conferences. These events aim to strengthen connections, review business advancements, and discuss growth strategies with global investment institutions, ensuring sustained communication channels and fostering a robust presence of institutional and foreign investments in the markets.
