UAE retail investors increasingly focused on homegrown markets

20/08/2025 03:23 AST

An overwhelming 85 per cent of UAE-based retail investors are currently invested in local stocks, and many are buying even more in response to global trade tensions, a study showed.

According to the latest edition of the UAE Retail Investor Beat by trading and investing platform eToro, UAE-based investors are strong supporters of their local market. While 85 per cent are currently invested in locally listed equities, with 39 per cent of respondents holding Abu Dhabi stocks, 28 per cent holding Dubai stocks, and 18 per cent holding both.

These investments reflect their confidence in the UAE economy. Sixty three per cent of investors stated they are "very confident" in its current performance, and a further 29 per cent indicated they are "somewhat confident". When it comes to the long-term performance of locally listed stocks, 59 per cent expressed that they are "very confident", with a further 32 per cent who are "somewhat confident".

Looking ahead, 48 per cent of investors forecast significant gains in the UAE stock market over the next 12 months, while 34 per cent expect steady growth. This conviction is also evident in investors' long-term expectations. 58 per cent believe that the Middle East will deliver the most substantial returns over the next five years, followed closely by the U.S. (50 per cent).

When asked which UAE sectors evoke the most optimism for investments over the next 12 months, real estate topped the list at 55 per cent, followed by technology (48 per cent), financial services (37 per cent), and energy (37 per cent).

George Naddaf, managing director at eToro Mena, shared: "The DFM and ADX are among the best-performing stock exchanges in the world this year, outperforming the S&P 500 by a considerable margin. Against this backdrop, our research confirms that investor confidence in the UAE market remains strong, supported by resilient performance across local indices, solid macroeconomic indicators, and sustained earnings across key sectors. Investors are favouring real estate, technology, financial services, and energy, as these sectors continue to benefit from government-backed initiatives. The fact that 85 per cent are already invested in UAE equities reflects a clear preference for local opportunities in the current environment."

Global tensions drive home bias and commodity interest
Despite strong confidence in their local market, geopolitical risk is firmly on the minds of investors: 90 per cent say tariffs and trade wars will significantly impact their portfolios in the next six months, and 89 per cent have already adjusted or plan to adjust their investments in response.

While the most common way investors are adjusting their portfolios in response to trade tensions is by increasing exposure to UAE equities (53 per cent), a close second is increasing allocations to commodities (51 per cent). This corresponds with respondents choosing gold or precious metals as the most resilient type of asset in a volatile trade environment (49 per cent). Crypto (45 per cent) was the second-most popular option, and it is already the most held asset class among UAE investors, currently with 54 per cent invested.

Naddaf added: "With 90 per cent of investors anticipating an impact from tariffs and trade wars, and 89 per cent adjusting their portfolios accordingly, UAE investors show an impressive level of adaptability. Besides local stocks, many are reallocating towards commodities such as gold and oil, which are viewed as reliable hedges against external volatility. This suggests a disciplined, dual-track approach: reinforcing exposure to domestic markets that are shielded from the impact of tariffs, while managing risk through defensive asset classes."

Uncertainty is not deterring investors from continuing to seek opportunities in the market. 65 per cent of UAE retail investors have already increased contributions to their investment portfolios over the previous months, and 76 per cent expect to increase contributions over the next three months.

Khaleej Times