Foreigners boost Q1 trading on Abu Dhabi Exchange to 4-year high

The Abu Dhabi Securities Exchange witnessed a 151 per cent surge in net foreign investment in the first quarter as it rolled out a new corporate structure, technology upgrades and a broader range of product offerings, Group Chief Executive Officer Abdulla Salem Alnuaimi said.

Foreigners bought and sold a total of about Dhs70 billion ($19 billion) worth of securities listed on the exchange in the quarter, leading to a net flow of 8.54 billion dirhams, data for the January-March period showed. Foreigners accounted for 42 per cent of trade on the bourse, a four-year high.

“We align with the UAE government’s goals to attract foreign investment, diversify the economy, and support a strong financial sector,” Alnuaimi said in an interview. “To increase foreign trading on ADX, we’re connecting with global exchanges and platforms, and promoting dual listings to bring in new investors.”

The $800 billion Abu Dhabi market, one of UAE's two key trading venues along with Dubai, embraced a group structure at the start of the year. It spun off its post-trading activities into two subsidiaries — for clearance and security-depository businesses.

ADX also introduced an updated technology platform that increased trading speeds and included support for high-frequency and algorithmic trading and a new customer-management system.

“Our upgraded trading system aims to enhance performance by 400 per cent,” Alnuaimi said. “In 2025, we plan to add new trading features, investment products, and services. We also want to welcome new trading participants.”

While the Abu Dhabi exchange’s main equity index made a sluggish start to the year, underperforming peer emerging markets, investor activity continued to strengthen. Trading volumes rose in the first quarter — 39 per cent by number of shares and 41 per cent by number of transactions.

The turbulence also underscored the challenges faced by stock exchanges as US President Donald Trump’s trade policies usher in an era of market chaos and sharp reversals in capital flows. ADX is betting on technology investments and product diversification to keep investor interest alive, all underpinned by economic growth in the emirate, Alnuaimi said.

“The global stock exchange business is constantly changing and highly competitive,” he said. “We’re seeing impacts from globalization, fast technological advancements, varied investor interests, regulatory changes, and the rise of digital platforms.”

Abu Dhabi joined a global selloff in April as money managers’ bets that the UAE would remain isolated from the impact of Trump’s tariffs were tested. Amid the volatility, however, ADX has been working to boost the city’s appeal to global investors as well as local entrepreneurs looking to list their startups.

The exchange’s “growth market” segment, which allows new-age companies in fields like sports and health care to list on the exchange without an initial public offering, expanded 34 per cent last year, according to Alnuaimi. As many as 14 companies are now traded in the segment.

“We have simplified listing processes to help private companies raise capital, gain visibility, and expand their investor base, contributing to Abu Dhabi’s economic diversification,” Alnuaimi said.

Meanwhile, ADX has been expanding its exchange-traded fund business. ETFs on the bourse boosted their market capitalization by 109 per cent to 784 million dirhams in the first quarter, Alnuaimi said. The exchange now has 16 ETFs cover 10 emerging and developed markets, UAE bonds and global sukuks.