After a unstable begin, world markets ended 2025 on a powerful observe, boosted by the AI growth and positive factors in European defence shares. UAE markets additionally carried out effectively, however Dubai and Abu Dhabi adopted totally 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% due to sturdy exercise throughout retail and company banking. Property-linked names akin 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.
Overseas inflows had been one other key theme. UAE equities continued to draw worldwide capital, helped by the nation’s safe-haven status, 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 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 assist development.
With the dirham pegged to the US greenback, UAE financial coverage typically follows the US Federal Reserve. Price cuts in late 2025 affected the area, and whereas easing could sluggish in early 2026, US coverage expectations stay a key issue for native markets.
Credit score development has stayed sturdy, with loans rising by double digits year-on-year in 2025. Banks stay effectively 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 sturdy momentum, backed by inhabitants inflows and coverage assist.
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 massive establishments delivered wholesome earnings development, supported by rising credit score demand, sturdy capital buffers, and regular curiosity margins.
As rates of interest edge decrease in 2026, margins could soften, however ought to be partly offset by larger lending volumes, charge revenue, 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 akin to Emaar, Aldar, and Union Properties proceed to profit from sturdy transaction volumes, inhabitants development, and regular curiosity from worldwide patrons.
Mortgage prices are anticipated to ease regularly as rates of interest decline, supporting the broader actual property ecosystem. Nevertheless, larger valuations imply sturdy execution is a should.
Power and commodities
Power shares stay particularly necessary for Abu Dhabi. The 2026 outlook is dependent upon oil costs, OPEC+ coverage, and world demand.
Oil costs softened on the finish of 2025, which weighed on the ADX. Wanting forward, demand is predicted 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 considered one of ADX’s standout tech names, reflecting Abu Dhabi’s concentrate on knowledge analytics, AI, and digital transformation.
A nationwide innovation technique is driving funding in AI, cloud computing, cybersecurity, and smart-city infrastructure. Generative AI tasks are already operating in healthcare, finance, and media, preserving capital flowing into the sector and providing traders a development alternative that’s each native and world.
IPO pipeline and capital markets
One other key theme for 2026 is the continued IPO pipeline. Each ADX and DFM have benefitted from a gentle move of latest listings in recent times, together with government-related entities and family-owned companies.
Additional IPOs in actual property, logistics, utilities and tech may deepen markets and develop alternatives for traders.
Dangers to think about
The UAE story is promising, however not with out dangers. A sustained decline in oil costs may weigh on fiscal revenues, market sentiment and elements of the fairness market, whilst non-oil diversification continues.
World development stays unsure, particularly in Europe and China. A sharper slowdown may impression commerce, tourism, and company earnings. With valuations excessive in areas like actual property and tech, delivering constant earnings will probably be much more necessary in 2026
Optimistic outlook for 2026
Total, the UAE outlook stays optimistic. Financial development is predicted to remain stable, inflation low, and coverage supportive. Banks are effectively capitalised, capital markets are deepening, and the nation continues to draw international funding and expert labour.
Earnings development throughout banking, actual property, power and expertise ought to proceed to assist fairness traders, even when returns are extra measured than earlier growth years. The UAE’s stability, ongoing diversification and concentrate on innovation strengthen its funding case heading into 2026.
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This communication is for info and training functions solely and shouldn’t be taken as funding recommendation, a private advice, or a suggestion of, or solicitation to purchase or promote, any monetary devices. This materials has been ready with out bearing in mind any specific recipient’s funding goals or monetary state of affairs, and has not been ready in accordance with the authorized and regulatory necessities to advertise unbiased analysis. Any references to previous or future efficiency of a monetary instrument, index or a packaged funding product are usually not, and shouldn’t be taken as, a dependable indicator of future outcomes. eToro makes no illustration and assumes no legal responsibility as to the accuracy or completeness of the content material of this publication.
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