As a result of the UAE government’s move last month to change weekends from Friday to Saturday, both DFM and ADX said they would operate from 10am to 3pm from Monday to Friday.
“As we go into 2022, this will have a substantial impact on the turnover and appetite of foreign investments into the UAE markets,” Marwan Shurrab, head of high-net-worth clients and retail equities at Al Ramz Capital, said.
“Our expectations are a healthy growth in turnover versus 2021 and that’s supported by not only the change in the working days but also in the strategy highlighted by Dubai in terms of supporting and pushing for a healthy pipeline of IPO’s [initial public offerings] within the DFM.”
Dubai announced last year that it intends to list 10 government and state-owned companies on the DFM in an effort to double the size of the market to Dh3 trillion ($816.8 billion). In the coming months, Emirates Central Cooling Systems Corporation – or Empower – will join Dubai Water and Electricity Authority, and Dubai road toll system Salik, as listed companies on Dubai Financial Market. The plans revealed by officials last year also include Tecom, owner and operator of investment-free zones in the emirate.
Additionally, the emirate’s authorities have launched a market maker fund worth Dh2bn to encourage listings in sectors such as energy, logistics and retail.
A Dh5bn IPO fund is also being launched in Abu Dhabi to support and encourage private companies to list on the local market.
IPO fund will invest in between five and ten private companies annually with a special focus on small and medium enterprises, and aim for a ticket size between ten and forty percent, according to officials.
“Aligning the work week with the West means that the UAE bourses would be open when the global capital markets are functioning, likely to induce increased trading activity,” Vijay Valecha, chief investment officer at Century Financial, said.
As investors become accustomed to the new arrangement and UAE bourses launch more IPOs in 2022, “that would potentially draw more foreign investments into the region and is likely going to boost liquidity and depth in the local markets going forward”, Mr Valecha said.
It is expected that both the DFM and ADX will perform well in 2022 due to the strong oil prices, he added.
In the past twelve months, the DFM exchange has gained more than 22 percent and is dominated by financial services and real estate companies including Emirates NBD, Dubai’s largest lender by assets, and Emaar Properties.
The ADX, part of Abu Dhabi’s holding company, is the second-largest bourse in the Arab world after Saudi Arabia’s Tadawul Stock Exchange with a total market capitalization of $1.48 trillion.
Aldar Properties, First Abu Dhabi Bank, the country’s largest lender by assets, Dana Gas, and Adnoc Distribution, among others, trade on ADX, which has risen more than 62 percent in the last year.