Dubai Financial Market breaks 11-year record - can it sustain the pace?

Dubai: The Dubai Financial Market general index has hit its highest point in more than 10 years – and this comes perfectly timed to welcome Dubai’s first stock market listing of 2025.

The DFM index is at 5,438 points, after a fairly sustained 6% gain in the year-to-date. There was a period of relative weakness in early to mid-April as investors reacted to US President Trump’s initial – and variable - tariff rollout on imports into America. But clearly, those concerns have evaporated, and further boosted by the deals President Trump struck with governments of the UAE, Saudi Arabia and Qatar during his Gulf tour.

Sentiments in May have been boosted by the strong financials put out by Emaar, Parkin, Salik and the banks DIB and Emirates NBD.

“The 5,438 levels are the best for DFM since April 2014 – and it’s a further improvement on the DFM having been the best-performing GCC index in 2024,” said Sameer Lakhani, Managing Director at Global Capital Partners.

In fact, in recent weeks, the UAE stock markets – DFM and ADX – have seen net foreign fund inflows. Now, on May 28, there will be the listing of Dubai residential REIT, the first IPO in Dubai this year. In Abu Dhabi, Alpha Data had gone public.

Based on the DFM's own Q1-2025 numbers, new investors keep signing up to have a feel of the Dubai capital market story.

The ADX is up 3% so far this year.

The other notable GCC performer is Kuwait, where the main index has shot up by 11%.

The Dubai Residential REIT IPO scored with all the right numbers, being oversubscribed 26 times plus. It garnered significant attention from institutional buyers, for whom the issue size was raised in between.

"Between Saudi Arabia and UAE, there's enough to keep investors busy through the coming weeks," said a market analyst. "Saudi budget airline flynas' IPO was outstanding and it's going to set up a fairly busy June and rest of the year."

The best part is that investors have shaken off April's tariff worries. The DFM's new record comes when the US markets are in a bit of a yo-yo phase, with worries about a recession and yawning trade deficit a constant worry. (The S&P is up 1% in the year-to-date, while Nasdaq's down 1%.)

"The 'rest of the world' trade in stocks is gathering momentum," said Lakhani. "There is an increasing emphasis on Emerging Markets' fund flows.

"And in Europe, Germany is the best-performing market with a gain of 20%." (Germany had announced substantially higher infrastructure and defense funding, and that's been the catalyst for the markets too.)