20 hours ago
UAE capital markets poised for growth as global investors pivot to Gulf
The UAE, particularly Dubai and Abu Dhabi, is emerging as a global magnet for capital, bolstered by rising foreign investor appetite, strong fundamentals, and a robust pipeline of initial public offerings (IPOs) across diverse sectors.
As global markets navigate an era of elevated tariffs and macroeconomic uncertainty, the UAE's financial markets are standing out for their stability, depth, and reform-driven momentum.
This sentiment was evident at HSBC's fourth annual GCC Exchanges Conference in London, which brought together over 300 institutional investors and more than 100 corporates from the Gulf region. All seven GCC stock exchanges, including the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX), participated in the event, highlighting the region's increasing importance in global capital allocation.
With the UAE accounting for $1 trillion in market capitalisation at the end of 2024, international interest in its financial ecosystem continues to surge. According to HSBC, the share of Global Emerging Markets (GEM) funds with UAE exposure has nearly doubled since mid-2021, rising from 35 per cent to 65 per cent. This rise is underpinned by investor confidence in the UAE's regulatory reforms, economic resilience, and a widening array of sectors — from renewables to logistics and retail — now opening to public investment.
'Global investors are recalibrating for resilience, and the GCC's balance sheet strength and sophisticated financial ecosystem make it a capital magnet. The UAE offers one of the most compelling growth stories in emerging markets today,' Nabeel Albloushi, head of Markets & Securities Services for MENAT at HSBC, said.
Albloushi emphasised that the UAE's deepening capital markets and sectoral diversification provide a fertile ground for sustainable capital deployment. The rising foreign institutional participation reflects a shift in strategy by global asset managers seeking exposure to high-yielding, stable, and reform-oriented markets.
The UAE's IPO momentum, particularly in Dubai, remains strong. Dubai Financial Market's total market capitalisation stood at Dh951 billion as of June 2025, underscoring its growing appeal to institutional investors. 'Dubai's capital markets are gaining increasing global prominence, reflecting investor confidence in the emirate's long-term economic trajectory,' said Hamed Ali, CEO of DFM and Nasdaq Dubai. 'The scale of value we offer continues to attract international capital looking for growth-oriented and well-governed opportunities.'
In 2024, the UAE featured prominently in the GCC's record-breaking IPO landscape. Despite a global slowdown in capital raising, the GCC recorded IPO proceeds that were 33 per cent higher in the first quarter of 2025 compared to the same period last year. Much of this growth was driven by the UAE and Saudi Arabia, where government-led privatisation efforts and regulatory liberalisation are reshaping local equity markets.
Abu Dhabi has played an equally strong role in advancing the UAE's capital markets agenda. Abdulla Salem Alnuaimi, CEO of ADX, highlighted the exchange's expanding global footprint. 'In the first five months of 2025 alone, net foreign investment in ADX reached around Dh11 billion, a 78 per cent increase compared to the same period last year,' Alnuaimi said. 'Foreign trading values have soared by more than 347 per cent over the past five years.'
ADX is also benefitting from increased sectoral breadth, with foreign investors showing growing interest in companies from energy, financial services, technology, and logistics. Alnuaimi stressed that the exchange's focus on transparency, governance, and sustainable practices supports long-term investor engagement.
The UAE's growing allure is not limited to equities. Fixed-income and private credit platforms are expanding, giving investors broader tools to tap into the region's growth story. Sovereign and corporate bond markets are deepening, backed by strong fiscal buffers and stable credit ratings.
The UAE's non-oil GDP growth, projected at 5.3 per cent in 2025 by the Central Bank of the UAE, adds to the investment case. With Dubai and Abu Dhabi pushing forward with economic diversification, the structural shift toward a knowledge-based economy is well underway. Sectors such as technology, hospitality, green energy, and infrastructure are witnessing rising capital inflows.
For emerging market strategists, the UAE stands out among peers. According to HSBC, the country's GDP growth is expected to outperform the broader EM average over the next three years, providing a relative haven for global capital amid weaker projections for traditional emerging economies.
Capital market analysts argue that as tariff tensions and geopolitical headwinds steer investors toward stable, reform-oriented destinations, the UAE appears firmly on the radar — offering both safety and upside. 'With continued reforms, strategic privatisations, and a diversified investment universe, the Emirates are well-positioned to remain a key pillar in the global capital raising landscape.'
The London conference also featured top UAE corporate leaders including Hesham Heikal of Emaar Properties, Faisal Falaknaz of Aldar Properties, and Areeb Pasha of Dubizzle. Their engagement with international investors underscored the UAE's ambition to align corporate strategy with sustainability, innovation, and global capital flows.
The outlook for the UAE's capital markets remains bright as government policies continue to encourage listings, enhance transparency, and integrate ESG considerations. The growing institutionalisation of capital markets in Dubai and Abu Dhabi signals a long-term structural shift rather than a cyclical upswing.
