UAE Capital Markets Are Becoming a Beacon for Foreign Investments!

The UAE’s capital markets are no longer a subplot, but rather the protagonist of the nation’s economic story. This resilient spike in issuance and foreign investment is not sudden but a result of a paradigm shift. According to the Capital Market Authority’s annual report, the UAE’s capital markets recorded strong growth and advanced regulatory maturity in the previous year. This is the result of heavy issuance activity, a surge in investment flows and an extended framework for growing financial activities.

The Capital Market Authority’s annual report shows strong performance in 2025

The CMA’s annual report mentioned that the average daily trading value reached AED 2.21 billion, showing a 24.16% increase compared to 2024. Furthermore, net foreign investment inflows aggregate to AED 18.7 billion, including AED 14.1 billion in Abu Dhabi and AED 4.6 billion in Dubai, while net institutional investment was standing at AED 1.17 billion.

Market capitalisation on the Abu Dhabi Securities Exchange increased to 4.7% to AED 3.14 trillion. Meanwhile, the Dubai Financial Market rose to 7.6% to AED 0.98 trillion.

Mohamed Ali Al Shorafa, Chairman of the CMA, has said the country’s long-term vision is in alignment with global market dynamics, which is why the country’s financial sector is now able to embrace a qualitative transformation. He further added that the Authority continues to develop a regulatory environment that balances economic growth, financial stability and institutional confidence.

Waleed Saeed Al Awadhi, Chief Executive Officer, said 2025 was hailed as a major milestone in the Authority’s development. Additionally, he noted that the CMA advanced legislative reforms, strengthened supervisory efficiency, and supported innovation to reinforce sustainable market growth.

Issuance is one of the main pillars that contributed to the growth

The CMA also highlighted that Issuance activity has played a key factor in market momentum during the previous year, with total share listings reaching Dh14.53 billion. This also adds Dh7.29 billion raised through initial public offerings and Dh7.24 billion through direct listings, reflecting a sustained desire for equity capital across Abu Dhabi and Dubai. Capital increases approved for public joint-stock companies added up to just over Dh6.1 billion.

The regulator strengthened its focus on governance and investor protection while keeping its focus on market growth. Companies’ alignment with corporate governance reporting went up to more than 98 per cent, while electronic systems for shareholder meetings continued to improve participation and transparency.

During the year, four companies listed on local markets and five public joint-stock companies were registered. In addition to this, the Authority approved three mergers and acquisitions. It brought the total number of listed companies to 199 by year-end.

In 2025, local investment funds also expanded sharply, which is why the number of licensed funds increased to 37 from 18 in 2024. This increase in the licence fund reflects a growth of 106%, and the end-of-service gratuity savings funds totalled 13.

Also, Foreign investment fund registrations reached 158 by the end of last year. Additionally, 44 funds were registered under passporting agreements, while four foreign funds were documented for listing purposes.

Effects on the Debt markets

Fixed-income markets were one of the significant players that had a strategic role in 2025. Sovereign and quasi-sovereign issuers continued to access global investors at competitive pricing, while corporate issuance grew in both conventional and Islamic formats.

Institutional frameworks, those anchored in the Dubai International Financial Centre and Abu Dhabi Global Market, boosted investor confidence by complying with the local issuance standards with international norms. This led to the debt markets complementing bank lending rather than replacing it.

Debt markets also heightened, particularly with the value of listed bonds and sukuk reaching Dh27.6 billion, alongside private placements adding to almost Dh638 billion. Within this segment, sustainable finance gained traction as green bonds and sukuk registered for listing rose to Dh8.6 billion, up more than 50 per cent from the previous year.

Supervision, Licencing and Enforcement activity

The licensing sector also recorded persistent and stable development, with licensed companies rising to 244 and total licences issued reaching 602. Furthermore, the CMA approved 252 new activities during the year.

The Authority issued 259 legal consultations and reviewed 58 grievances. Additionally, it obtained 12 ISO certifications, reflecting its institutional development efforts.

The Supervisory activity has grown under the risk-based framework, which led to the Authority conducting on-site inspections for 80 of 84 targeted companies and evaluating risks for 155 licensed firms. Additionally, it organised 14 compliance workshops, which were attended by 2,291 participants.

On the other hand, Enforcement activity stayed measured but functional. The CMA handled 75 complaints last year and issued 324 supervisory actions, which had 99 warnings, 82 alerts, 73 financial penalties and 44 referrals to the public prosecution, with two trading suspensions and four directives.

While administrative fines amounted to just over Dh8 million, around Dh10.8 million was refunded to investors. The authority also processed more than 41,000 applications related to unclaimed dividends, disbursing nearly Dh240 million to investors.

Human Capital, Emiratisation And  Regulatory Credibility

The Authority continued investing in national talent development. Moreover, Emiratisation reached 82.8%, while the workforce totalled 169 employees.

Women represented 42.8% of employees. Additionally, they held 9.1% of leadership positions by the end of 2025.

Regulatory oversight by the Securities and Commodities Authority reinforced governance consistency, which helped sustain participation from long-term institutional investors. This credibility differentiated the UAE within emerging market allocations.

A notable regulatory development in 2025 was the rapid expansion of oversight for virtual assets. The number of entities registered or licensed in the sector increased sharply, supported by closer coordination with Dubai’s virtual assets regulator and the rollout of a dedicated supervisory framework designed to balance innovation with financial stability.

Regional and global capital flows

The UAE’s market performance again echoed its growing role as a bridge between regions. Capital flows linking Asia through FurtherAsia and a few of the African markets through FurtherAfrica increased the relevance of UAE exchanges as cross-border platforms rather than purely domestic platforms.

This positioning allowed the country to intermediate investment into infrastructure, energy and logistics assets beyond its borders, strengthening its financial diplomacy alongside commercial returns.

Foreign Engagement and Participation

The Authority has been able to cement the country’s foreign policies. The foreign investors’ participation is one of the major components that defined the UAE capital markets’ performance in 2025. Also, it expanded the network of memoranda of understanding to 166, which includes seven newly signed agreements.

In the previous year, it held 52 bilateral meetings, processed 65 requests from IOSCO members, and participated in 10 international conferences.

This whole process has helped in strengthening the cross-border regulatory layout and, at the same time, making sure the country is positioned within the global financial ecosystem. A few factors, like transparent settlement infrastructure, evident disclosure conditions and currency stability, which backed inflows even as global risk appetite fluctuated, positioned the UAE as a regional anchor for portfolio capital.

2026 is going to have a strong momentum

The UAE capital markets’ performance in the previous year suggested that consolidation rather than acceleration is the primary aim in 2026. Depth, liquidity and regulatory clarity appeared as the stable strengths. While global conditions remained uncertain, domestic market architecture offered resilience.

According to the Analysts’ prediction, continued progress will rely on maintaining issuance quality, boosting derivatives and improving secondary market liquidity. It can be understood from the entire process that 2025 experienced that the UAE’s capital markets are becoming a mature financial ecosystem rather than a cyclical evolution story.