The market capitalization of shares is 65% of the UAE’s GDP

ABU DHABI 5th August 2019 WAM

The market value of UAE capital markets rose to a 19-year high of nearly 910 billion dirhams last July, with many international firms expecting a trillion-dollar barrier by the end of 2019.

The market capitalization of UAE listed companies at the end of the first seven months of this year accounted for 65% of the UAE’s GDP in 2018, up from 56% in 2017. This reinforces the UAE’s position in the global competitiveness indices.

According to the standards of the international financial institutions, the index of the market value of shares listed in the capital markets compared to GDP is considered the most important indicators that are taken into account in preparing the competitiveness reports of countries internationally.

The analysis of the movement of developments in the market value shows that the strong growth recorded since the beginning of this year came with the support of several factors, including related to the improvement in the prices of shares traded companies in the recent period, along with the influx of new companies or increase the capital of listed companies As well as the influx of new foreign investments.

Financial experts expect the pace of improvement in the market value of shares traded during the coming period as prices continue to rise, especially the prices of the leading companies listed in the banking and real estate sectors, which supports similar expectations of international houses of expertise to reach the market value of one trillion trillion by the end of 2019.

According to official figures issued by the Securities and Commodities Authority, the market capitalization of the country’s GDP reached 53.3% in 2014, rising to 56% in 2015 and 62% in the following year.

The market capitalization of traded companies accounted for 62.5 percent of the country’s GDP in 2017, but fell to 61.5 percent in 2018 before rising strongly at the start of the year.

Banking, finance, real estate and communications sectors account for 85% of the total market capitalization of listed companies by the end of 2018.

The banking and finance sector is the first in terms of market value for shares of the sector, accounting for about 50% of the total market value of shares listed in the financial markets by the end of 2018. Followed by the telecommunications sector and then real estate and other sectors