UAE’s ADX Draws $19B in Foreign Trades, Signals Shift in Capital Flows
Foreign investment activity on the Abu Dhabi Securities Exchange (ADX) soared in the first quarter of 2025, signalling a clear acceleration in the UAE’s positioning as a financial hub.
According to newly released figures, foreign trades (buy and sell) on ADX reached AED69.79 billion ($19 billion), a 62.2% increase from AED43.03 billion in Q1 2024. Net foreign investment surged by an even more striking 151%, climbing from AED3.4 billion to over AED8.5 billion year-on-year.
The sharp rise is not only a continuation of a broader multi-year trend, but also a reflection of shifting global capital flows amid persistent economic uncertainty elsewhere. With developed markets grappling with inflation cycles, slowing growth, and geopolitical tensions, the UAE’s relative macroeconomic stability, investor-friendly reforms, and sovereign-backed market listings have become strong pull factors for international capital.
Foreign participation in ADX trading rose to 42% in Q1 2025, up from 31% in the same period last year, an 11-percentage-point increase that underscores the market’s increasing global appeal. This is particularly significant considering ADX has only recently begun to gain prominence among emerging market investors after MSCI and FTSE index inclusions, and ongoing efforts to increase free float and diversify listed assets.
Institutional investors also deepened their presence. Their combined buy-sell value grew 22% to AED134.9 billion in Q1 2025, up from AED110.6 billion a year prior. Institutional engagement tends to be more long-term and signals confidence in structural fundamentals — especially important for a market that is evolving from being retail-driven to institutionally anchored.
In terms of overall liquidity, the exchange saw a 21% rise in total trading value (to AED83.3 billion), while traded volumes jumped 39% to 22.45 billion shares. The number of trades executed rose 41% to 1.35 million. These figures point to a healthier, more active market - crucial for both price discovery and ease of entry/exit for investors.
Another area of growth came from Exchange-Traded Funds (ETFs), with market value more than doubling to AED1.64 billion (a 109% increase). As passive investing gains ground globally, this jump suggests ADX is beginning to attract new investor segments seeking lower-cost, diversified exposure to UAE assets.
Market capitalisation rose a modest 3.2% to AED2.93 trillion. Though lower than trading growth, this reflects market resilience rather than revaluation, suggesting capital is flowing more into transactional activity rather than price inflation of listed entities.
The strong Q1 performance could be attributed to several key drivers: continued IPO momentum in the UAE, robust energy sector earnings, and clarity around the government's economic diversification roadmap. High-profile listings such as ADNOC Gas and other state-linked entities have drawn considerable institutional and sovereign wealth interest, improving investor sentiment.
Regionally, ADX’s gains reflect a wider Gulf trend, where capital markets in Saudi Arabia, Qatar, and the UAE are increasingly competing for foreign inflows. However, ADX’s edge lies in its pace of reform, from introducing new instruments to streamlining investor onboarding processes and adopting advanced trading infrastructure. This positions it well to absorb a greater share of global emerging market allocations.
As the UAE continues to align with global ESG standards, launch dual listings, and enhance transparency through initiatives like the FX Derivatives platform and improved corporate governance codes, ADX’s attractiveness is only expected to grow. However, sustained momentum will depend on maintaining this policy clarity and expanding the range of sectors represented on the exchange, particularly in technology, healthcare, and sustainability-linked industries.
