After a unstable begin, international markets ended 2025 on a robust observe, boosted by the AI growth and positive factors in European defence shares. UAE markets additionally carried out properly, however Dubai and Abu Dhabi adopted completely different paths.
Dubai’s DFM index hit multi-year highs, up 24% together with dividends, pushed by energetic buying and selling and new listings, outperforming the S&P 500. Abu Dhabi’s ADX noticed extra modest positive factors of simply over 8%, reflecting volatility in oil markets.
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Not all sectors moved equally. In Dubai, actual property and property-linked shares had been among the many prime performers. In Abu Dhabi, banks and new financial system names like Presight AI led the market. The Abu Dhabi Islamic Financial institution stood out, with shares climbing over 40% because of robust exercise throughout retail and company banking. Property-linked names corresponding to Union Properties and Amlak Finance additionally benefitted from Dubai’s actual property cycle, supported by inhabitants development, new visa pathways, and sustained curiosity from worldwide patrons.
International inflows had been one other key theme. UAE equities continued to draw worldwide capital, helped by the nation’s safe-haven repute, regional hub standing, and a gentle pipeline of IPOs throughout each exchanges.
The macro backdrop
Heading into 2026, the UAE’s financial system stays on a supportive path. The nation is steadily shifting from oil dependence in the direction of a extra diversified financial system, with non-oil sectors now accounting for a considerable share of GDP.
The Central Financial institution of the UAE expects actual GDP development of round 5.3% in 2026, up from roughly 4.9% in 2025, pushed by each oil and non-oil exercise. Inflation stays low. Headline inflation slowed to round 0.7% in mid-2025, and the central financial institution expects it to common about 1.8% in 2026, giving policymakers room to help development.
With the dirham pegged to the US greenback, UAE financial coverage typically follows the US Federal Reserve. Charge cuts in late 2025 affected the area, and whereas easing might sluggish in early 2026, US coverage expectations stay a key issue for native markets.
Credit score development has stayed robust, with loans rising by double digits year-on-year in 2025. Banks stay properly capitalised, with low non-performing mortgage ratios.
Tourism, aviation, and logistics proceed to be main development engines, particularly in Dubai, the place transport and storage are among the many fastest-growing sectors. Residential actual property additionally confirmed robust momentum, backed by inhabitants inflows and coverage help.
Sectors to look at in 2026
Banks and financials
Banks stay a core a part of each the ADX and DFM. The Abu Dhabi Islamic Financial institution, the Abu Dhabi Industrial Financial institution and different giant establishments delivered wholesome earnings development, supported by rising credit score demand, robust capital buffers, and regular curiosity margins.
As rates of interest edge decrease in 2026, margins might soften, however must be partly offset by increased lending volumes, payment earnings, and continued safe-haven inflows into the UAE. Returns could also be reasonable in contrast with 2025, however banks are anticipated to stay a key pillar of the market.
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Actual property and property-linked shares
Dubai’s actual property cycle stays a prime theme for native traders. Builders and property-linked names corresponding to Emaar, Aldar, and Union Properties proceed to profit from robust transaction volumes, inhabitants development, and regular curiosity from worldwide patrons.
Mortgage prices are anticipated to ease steadily as rates of interest decline, supporting the broader actual property ecosystem. Nonetheless, increased valuations imply robust execution is a should.
Power and commodities
Power shares stay particularly vital for Abu Dhabi. The 2026 outlook will depend on oil costs, OPEC+ coverage, and international demand.
Oil costs softened on the finish of 2025, which weighed on the ADX. Wanting forward, demand is anticipated to enhance, and the projected surplus ought to slim, with OPEC sustaining a optimistic view on demand.
AI, tech and digital infrastructure
The UAE continues to place itself as a regional hub for synthetic intelligence and superior digital infrastructure. Presight AI has been one in every of ADX’s standout tech names, reflecting Abu Dhabi’s deal with knowledge analytics, AI, and digital transformation.
A nationwide innovation technique is driving funding in AI, cloud computing, cybersecurity, and smart-city infrastructure. Generative AI initiatives are already working in healthcare, finance, and media, preserving capital flowing into the sector and providing traders a development alternative that’s each native and international.
IPO pipeline and capital markets
One other key theme for 2026 is the continuing IPO pipeline. Each ADX and DFM have benefitted from a gentle stream of recent listings in recent times, together with government-related entities and family-owned companies.
Additional IPOs in actual property, logistics, utilities and tech might deepen markets and broaden alternatives for traders.
Dangers to think about
The UAE story is promising, however not with out dangers. A sustained decline in oil costs might weigh on fiscal revenues, market sentiment and components of the fairness market, at the same time as non-oil diversification continues.
World development stays unsure, particularly in Europe and China. A sharper slowdown might affect commerce, tourism, and company earnings. With valuations excessive in areas like actual property and tech, delivering constant earnings might be much more vital in 2026
Optimistic outlook for 2026
Total, the UAE outlook stays optimistic. Financial development is anticipated to remain strong, inflation low, and coverage supportive. Banks are properly capitalised, capital markets are deepening, and the nation continues to draw international funding and expert labour.
Earnings development throughout banking, actual property, power and know-how ought to proceed to help fairness traders, even when returns are extra measured than earlier growth years. The UAE’s stability, ongoing diversification and deal with innovation strengthen its funding case heading into 2026.
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