UAE stocks worth more than $1tn for first time

Stocks listed in the United Arab Emirates are now worth more than $1tn for the first time, helped by a surge in firms tied to an Abu Dhabi royal that account for more than a third of the total value, and a flurry of local listings.

That makes the combined UAE market, which includes exchanges in Dubai and Abu Dhabi, bigger than Milan or Madrid. While dwarfed by the nearly $3tn Saudi Arabian bourse, the UAE is larger than most emerging markets, barring a few like India and China, according to data compiled by Bloomberg.

A particularly eye-catching feature of the $1tn milestone is the weighting of companies linked to Sheikh Tahnoon bin Zayed al-Nahyan. The royal — one of Abu Dhabi’s two deputy rulers, the UAE’s National Security Adviser and brother to its President — has emerged as one of the most important names in global business and sits atop a $1.5tn empire.

That includes International Holding Co, which is chaired by Sheikh Tahnoon and is the UAE’s largest public company. IHC has surged over 43,000% in the past few years, giving it a market capitalization of close to $250bn — a quarter of the combined exchanges’ value.

Locals own 88% of IHC, according to data from the Abu Dhabi bourse and the firm is 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 made investments spanning everything from Elon Musk’s SpaceX to Aldar Properties PJSC, the emirate’s largest property developer.

Sheikh Tahnoon is also chairman of First Abu Dhabi Bank PJSC, which last year considered an offer for Britain’s Standard Chartered Plc. Together, the lender and IHC have a weighting of over 50% on Abu Dhabi’s benchmark FTSE ADX General Index.

The UAE stock market is part of the widely-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 surge to $1tn was also helped by a string of new share sales in the country. The UAE, alongside Saudi Arabia, has led a rush of listings in the Gulf since 2021 as governments sought to raise cash to diversify economies. A wealth fund overseen by Sheikh Tahnoon in 2020 bought a stake in Lulu International Holdings, the parent company of the hypermarket chain operator that pulled off the UAE’s biggest listing of the year.

That rush of deals is likely to continue, including a potential offering of Abu Dhabi flag carrier Etihad Airways, Delivery Hero SE’s Middle Eastern unit Talabat and IT services firm Alpha Data.