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UAE: Abu Dhabi bourse’s market cap set to reach Dh3 trillion this year

ADX becomes the second largest stock market in the Middle East

Abu Dhabi Securities Exchange’s (ADX) market capitalisation is on course to reach Dh3 trillion mark this year after it Dh2 trillion for the first time earlier this week, say analysts

Abu Dhabi bourse’s market cap crossed the Dh2 trillion mark following the completion of Borouge initial public offerings (IPO) listing last week, the largest-ever listing on ADX and the largest for a petrochemical company in the Middle East.

The increase in ADX’s market cap is attributed to a spate of IPOs in the last few quarters including Abu Dhabi Ports, Fertiglobe, Adnoc Drilling, Alpha Dhabi and Multiply Group.

The UAE capital bourse has recorded a 25 per cent increase in its market cap till June 6.

In April, ADX rebranded its “Second Market” to the “Growth Market” to accelerate Abu Dhabi’s fast-developing ecosystem for emerging companies.

The advances in the exchange’s market cap came on the heels of a bumper year in 2021, when its market cap more than doubled to Dh1.6 trillion from Dh750 billion. That followed several new listings on the Growth Market, including Palm Sports, Zee Stores and Easy Lease, three subsidiaries of IHC, and an Exchange Traded Fund.

On Tuesday, ADX closed 0.31 per cent lower at 9,696.8 points in line with the decline in most of the regional bourses and global bourses due to inflation fears.

Vijay Valecha, chief investment officer at Century Financial, said the UAE IPOs had a record year in 2021 and continued the trend in 2022 with an unprecedented surge in issuances, which is driven by a combination of supportive regional regulatory actions as well as a shift in investor sentiment back towards GCC markets.

“A series of IPOs and listings by some of the UAE’s largest companies such as Adnoc Drilling, Borouge, and Fertiglobe have helped the ADX’s market cap to post double-digit growth. The market capitalization of the FTSE ADX is bolstered by more than $5 billion in share offerings and listings over the past year. FTSE ADX has been the seventh-best performing index on a year-to-date basis despite its global peers recording negative returns and the upward momentum is expected to continue as Abu Dhabi’s plan to list 13 new companies on the Abu Dhabi Securities Exchange (ADX) by year-end which is expected to boost market value to Dh3 trillion,” said Valecha.

During the first quarter of 2022, the exchange recorded an 87 per cent year-on-year increase in the value of total trades made in the first quarter of 2022. Traded values on the exchange rose to Dh202 billion in Q1 2022 from Dh108 billion in Q1 2022.

Meanwhile, the market value of shares owned by foreign investors in Q1 2022 jumped 163 per cent to Dh131 billion from Dh50 billion in Q1 2021.

— waheedabbas@khaleejtimes.com