UAE-listed stocks topped $1 trillion in value for the first time

Stocks listed in the United Arab Emirates are now worth more than $1 trillion for the first time, helped by a surge in companies linked to the Abu Dhabi royal, which accounts for more than a third of the total value, and a flurry of domestic listings.

That makes the combined UAE market, which includes the Dubai and Abu Dhabi exchanges, larger than Milan or Madrid. Despite being dwarfed by the nearly $3 trillion Saudi Arabian bourse, the UAE is bigger than most emerging markets, with the exception of a few such as India and China, according to data compiled by Bloomberg.

A particularly striking feature of the $1 trillion milestone is the weight of companies linked to Sheikh Tahnun bin Zayed Al Nahyan. The shahi – one of Abu Dhabi’s two deputy rulers, the UAE’s national security adviser and the brother of its president – has emerged as one of the most important names in global business and atop a $1.5 trillion empire.

It includes the International Holding Company, which is chaired by Sheikh Tahnun and is the largest public company in the UAE. IHC has grown more than 43,000% over the past few years, giving it a market capitalization close to $250 billion — a quarter of the combined exchange’s value.

Locals account for 88% of IHC, according to Abu Dhabi Bourse data. Once an obscure fish-farming company, the firm is now at the forefront of a drive to diversify the UAE’s economy away from oil. The company and its units – some of them listed in Abu Dhabi – have invested in everything from Rihanna’s lingerie line and Elon Musk’s SpaceX to Alder Properties PJSC, the emirate’s biggest property developer.

Sheikh Tahnun is also chairman of First Abu Dhabi Bank PJSC, which considered an offer for Britain’s Standard Chartered plc last year. The lender and IHC together hold more than 50% weighting on Abu Dhabi’s benchmark FTSE ADX General Index.

The $1 trillion milestone has long been sought by Abu Dhabi’s ruling family, and the stock market surge reflects their ambitions to turn the city into a global financial center. Members of the emirate’s Al Nahyan clan expect rising values ​​to attract international capital and encourage local investors to keep their money in the country, Bloomberg News reported in April.

The UAE stock market is part of the broadly tracked MSCI Emerging Markets Index, comprising 1.2% of the benchmark, according to data compiled by Bloomberg. IHC is not a member of the index, while its units Aldar and Multiply Group PJSC — as well as First Abu Dhabi Bank — are included.

The $1 trillion jump was also helped by a string of new share sales in the country. The UAE, along with Saudi Arabia, has led an influx of listings in the Gulf from 2021 as governments seek to raise cash to diversify the economy. In 2020, a wealth fund overseen by Sheikh Tahnun bought a stake in Lulu International Holdings, the parent company of the hypermarket chain operator that pulled out of the UAE’s biggest listing of the year.

That flurry of deals is likely to continue, including potential offers from Abu Dhabi flag carrier Etihad Airways, delivery hero SE’s Middle Eastern unit Talabat and IT services firm Alpha Data.

Despite rising regional tensions, the Dubai Financial Market General Index continues to trade at 2014 highs due to the city’s economic and population growth. It has the leading advantage over all Gulf benchmarks this year with a 17% advance, while Abu Dhabi shares are trading 1.4% lower in 2024.