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DFM General Index: 1-Year Dynamics

 

Abu Dhabi Securities Exchange Index: 1-Year Dynamics

Yield, Forward Rate 1m10y, UAE, 1-Year Dynamics

Brent Oil, 1-Year Dynamics

The UAE stock markets experienced robust growth between July 14 and July 28, 2025. The Dubai Financial Market (DFM) index climbed 5.3%, whereas the Abu Dhabi Securities Exchange (ADI) rose by 3.0%. During this period, the price of Brent crude oil decreased by 1.2%. This performance highlights investor confidence driven by strong financial results and sustained economic growth, which overshadow concerns about global instability. In contrast, the S&P 500 index saw a 1.9% increase over the same timeframe. 

The Financial sector reported an average growth of 4.4%, buoyed by strong bank earnings. Shares of First Abu Dhabi Bank (FAB: +8%) surged following the release of record earnings for the first half of the year. Emirates NBD (EMIRATES NBD: +10.3%) shares also rose despite a reduction in net profit due to higher tax liabilities, as the bank’s operating performance remained solid. Additionally, the Industrial sector experienced a gain of over 5%, with airlines leading the way. Air Arabia (AIRARABIA: +7.78%) stood out, boosted by positive forecasts indicating a 40% increase in seat capacity.

UAE Treasury bond yields remained stable, while U.S. Treasury bonds decreased by 16 basis points. This suggests a widening spread, as investors seem to believe that risks to the U.S. economy have lessened somewhat in light of recent macroeconomic data releases.

Economic Updates

• According to the International Monetary Fund (IMF), the economy of the UAE is projected to grow by 4% in 2025, driven by robust performances in the non-oil sector, with significant contributions from tourism and construction.
• Dubai International Financial Centre (DIFC) reported its best-ever performance for the first half of 2025. The number of registered companies increased by 25%, reaching 7,700, and the workforce expanded to nearly 47,901 professionals.
• According to FocusEconomics, inflation in Dubai fell to 2.8% y/y in June.

Corporate News

• First Abu Dhabi Bank (FAB: +4.97%) reported a record net profit of AED 10.65 billion for the first half of 2025, representing a 26% increase compared to the same period last year.
• Emirates NBD (EMIRATESNBD) reported a 9% drop in net profit for the first half of 2025, to AED 12.5 billion, attributed to higher tax payments. Nevertheless, the bank’s operating income rose by 9% due to robust growth in loans and deposits.
• The European Commission has initiated a detailed investigation into ADNOC’s (ADNOCGAS, ADNOCDRILL, ADNOCDIST) proposed acquisition of the German chemical company Covestro, examining potential distortions of competition stemming from UAE government subsidies.

Two-Week Outlook

Supported by robust financial results from leading banks and companies, along with consistent foreign investment inflows, the UAE stock markets are poised to maintain their upward trajectory. The IMF’s optimistic macroeconomic forecasts and the remarkable growth in non-oil trade bolster confidence in the country’s economic sustainability. Nonetheless, the EU’s investigation into the ADNOC-Covestro deal may introduce some volatility in ADNOC-related equities. Additionally, it is crucial to consider that the potential negative impact of U.S. import duties on international trade and the increase in oil production quotas by OPEC+ countries could lead to a significant decline in prices this fall. The OPEC+ meeting on August 3 might result in further quota increases starting in September, potentially exerting additional pressure on regional oil prices and companies. However, it’s worth noting that the influence of oil companies on UAE indices has diminished considerably.

Given the strong corporate earnings and favorable economic indicators, we anticipate that UAE markets may continue to outperform global indices in the short term.