Dubai: As expected, the DFM and ADX opened positive in early trades Wednesday (November 6) in much the same way that most Asian stock markets did, as a win for Donald Trump in the US Presidential election inched closer to reality.
By the end of the first 30 minutes of trading, the DFM general index was up 0.46% (4,614) and ADX by 0.152% (to 9398.23).
While the Trump win vibes play in the background, both UAE stock markets are readying for more localized action. On ADX, LuLu Retail will list on November 14, but today will see the hypermarket operator announce the details of the oversubscription.
DFM is gearing for the Talabat IPO confirmation date, which many analysts expect to happen any day.
That’s bound to draw more investors, domestic and foreign. “Foreign investors have been very active in the UAE and Saudi markets as strong regional market trends, increasing IPO activity, and US election volatility along with interest rate cuts have resulted in the flow of foreign money here,” said Arun John, Chief Market Analyst at Century Financial.
As of end October, net long foreign investment in UAE stocks had grown from Dh2.32 billion ($631 million) to Dh9.54 billion ($2.5 billion), making for a 311% increase increase.
“The UAE markets have also seen a net long foreign investment of Dh22.1 billion ($5.98 billion) in the year's first 10 months.”
Will US election outcome change dynamics?
Market analysts are confident that UAE, Saudi stocks will keep pulling in sustained higher inflows of foreign funds. LuLu Retail tapped some heavy support, according to analysts, and the Saudi IPO pipeline of recent times has exerted its own pull.
There will also be the US Federal Reserve's next steps in monetary policy, which will have a say in the cost of financing and growth in the UAE.
But there is still the regional situation to factor in. "Geopolitical tensions remain a source of risks and volatility in the market," said Hani Abuagla, Senior Market Analyst at XTB MENA. "There will also be the US Federal Reserve's next steps in monetary policy, which will have a say in the cost of financing and growth in the UAE. Retail and institutional investors (need to) readjust their views and their portfolios."
