Page 194 - SALIK PR REPORT AUGUST 2024

The stock lure: IPOs and dividend payouts are magnets

for yield-hungry investors in GCC

Story by Deepthi Nair
• 5d • 8 min read

Wali Khan, a UAE-based Pakistani telecoms engineer, has been investing in Emirates' stock markets for the
past four years.

Mr Khan is one among a growing wave of new investors who have flocked to the Dubai Financial Market
(DFM) and the Abu Dhabi Securities Exchange (ADX) – the two main stock markets in the UAE – over the
past few years.

The robust momentum of the initial public offerings, attractive valuations as well as the visibility on
healthy dividend payouts from listed companies are among some of the reasons that have helped in
expanding the investor base in the Arab world's second-largest economy.

The DFM, home to the largest capitalised property developer Emaar Properties and Dubai's biggest bank
Emirates NBD, attracted 72,583 new investors in the first six months of 2024. Trading activity rose
significantly along with trade values of stocks on the bourse amid continued economic momentum in the
emirate.

The Abu Dhabi Securities Exchange, the second-largest Arab stock market by market value, welcomed
50,000 new investors last year. Trading volume climbed 37 per cent year-on-year while the foreign
ownership of ADX-listed companies rose by 35 per cent on an annual basis, according to the latest ADX
data.

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The continuing momentum of listings in the UAE perhaps is the biggest lure for investors in recent
quarters. Companies raised $890 million through IPOs in the second quarter of this year alone, according
to PwC's quarterly IPO Watch report.

Bourses in the other states of the six-member bloc of GCC have seen a similar rise in listing activity as well
as stronger investor interest.

Saudi Arabia's Tadawul, the biggest Arab bourse, which is home to companies like the world's top oil
producer Saudi Aramco and financial institutions including Saudi National Bank and Al Rajhi Bank, led in
the volume of IPO deals in the second quarter. Companies in the kingdom raised an aggregate of $1.6
billion, or 61 per cent of the total IPO activity recorded, during the period, according to the PwC report.

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