Published on: October 10, 2023
Author: Derar Hasn
|Table of Content
|How to invest in the Dubai Financial Market (DFM)
|What is the Dubai Financial Market (DFM)?
|What is the difference between NASDAQ Dubai and DFM?
|How to start investing in the DFM
|Can a foreigner invest in the Dubai stock market?
Investing in the Dubai Financial Market (DFM) might be a great way to diversify your portfolio, allowing you to take part in the vibrant economy of the United Arab Emirates. In this blog post, we'll reveal how to invest in the DFM. Whether you're a beginner looking to dip your toes in one of the UAE's three stock markets or a seasoned pro wanting more exposure, this blog will provide you with everything you need to start investing in Dubai.
What is the Dubai Financial Market (DFM)?
The Dubai Financial Market, or DFM for short, is a stock exchange located in Dubai, United Arab Emirates. It’s one of the largest and most liquid exchanges in the Middle East and North Africa (MENA) region, next to NASDAQ Dubai, Abu Dhabi Securities Exchange (ADX), Tadawul and Qatar Stock Exchange (QSE). Established in 2000, the DFM provides a platform for buying and selling various financial instruments, including stocks, bonds, derivatives, exchange-traded funds (ETFs) and more. Before becoming a public joint-stock company in 2006, it was entirely owned by the Dubai government.
Dubai’s stock exchange is regulated by the Securities and Commodities Authority (SCA). It plays a crucial role in developing the UAE's financial sector and provides opportunities for local and international investors to participate in the region's economic growth.
How many companies are listed in the Dubai Financial Market?
In 2022, DFM was home to over 70 companies, with a combined market capitalization of AED 582 billion (USD 158.4 billion). The listed companies span across various industries such as banking, telecommunications, real estate, healthcare, retail, and energy. This allows investors and traders to tap into a broad spectrum of investing and trading opportunities. Big names include Emirates NBD Bank, Emaar Properties, Dubai Islamic Bank, and Dubai Electricity and Water Authority (DEWA), which have established themselves as key players in their respective sectors. So, no matter what sector you're interested in, the DFM offers many options to explore.
What is the difference between NASDAQ Dubai and DFM?
Ah, that's a great question! NASDAQ Dubai is a separate stock exchange in Dubai that focuses on attracting international investors and issuers. It was established in 2005 as a partnership between the Dubai Financial Market and NASDAQ OMX Group. NASDAQ Dubai provides a platform for trading regional and international assets, including stocks, bonds and real estate investment trusts (REITs). Regulated by the Dubai Financial Services Authority (DFSA), the stock exchange is located in the Dubai International Financial Centre (DIFS). The major shareholder of NASDAQ Dubai is DFM, owning 66% of the shares.
So, while both the DFM and NASDAQ Dubai provide investment opportunities, the DFM focuses more on the local market, while NASDAQ Dubai aims to attract international investors.
How many financial markets are in the UAE?
The United Arab Emirates has three stock markets. We’ve already mentioned Dubai Financial Market (DFM) and NASDAQ Dubai, but there’s also one more. Launched in 2000, the Abu Dhabi Securities Exchange (ADX) is a marketplace for trading securities, such as shares issued by public joint stock companies, bonds issued by governments or corporations, exchange-traded funds, and any other financial instruments approved by the SCA.
How to start investing in the DFM
One of the traditional approaches is to register for your DFM Investor Number (NIN) by the DFM mobile app, or through a DFM licensed brokerage.
But what if there was a faster and simpler way? The answer is amana, a Dubai-based, leading MENA neo-broker with 125,000+ investors and traders worldwide. So, all you have to do to unlock access to Dubai stocks is:
Download for free the amana app from the App Store or Google Play.
Open a free account.
Deposit your funds.
And that’s it! You don’t need to apply for any NIN. After completing these simple steps, the world of endless possibilities in UAE’s stock market will open up for you.
amana empowers you to trade and invest in big names you see every day like Emaar, Emirates NBD, DEWA, Mashreq, Salik and many more wherever you are. With the amana app, you can access both unleveraged and leveraged assets. It means you can invest in the long term or speculate on the Dubai stock market, taking advantage of prices going up and down.
To make it easier for everybody to access the Dubai Financial Market, investing in Dubai stocks without buying whole shares is possible with the amana app. You can buy fractional shares, allowing you to own a small piece of the company’s share instead of the entire share. Convenient, right?
And on top of that, buying shares of local companies with amana can bring you dividends, portions of companies’ earnings shared with investors. So why not diversify your investment portfolio by including dividend-paying Dubai companies? Just remember to carefully review each company's dividend policy and eligibility criteria.
Can a foreigner invest in the Dubai stock market?
If you live in a different country than the UAE, we have good news! Yes, you can trade and invest in the Dubai stock market too. We've crashed all the barriers and created the amana app in such a unique way that it could be your gateway to the financial market of Dubai, no matter where you’re based (except for a few exceptions). So, if you’re reading this blog and you’ve been looking for a way to invest and trade in the UAE’s stock market, here it is. Your research is done. Just download the amana app and dive into the Dubai Financial Market without leaving your country (and even your apartment).
Is it worth investing in the Dubai stock market?
The Dubai stock market holds great potential for investors seeking opportunities in the Middle East. In September 2023, the Dubai Financial Market saw shares worth AED 136.4 billion (USD 37.1 billion) traded, and its consolidated gains reached over AED 3.7 billion (USD 1 billion), its highest levels since mid-July 2015.
With its stable economy, security and the tax-free environment (no personal income or capital gains tax), Dubai offers a compelling investment landscape across various sectors, including banking, real estate, telecommunications, tourism, healthcare, technology, and energy. What’s more, Dubai's status as a global business hub attracts international investors, providing ample liquidity and creating a dynamic investing and trading environment.
While all investments carry some level of risk, careful analysis and research can help identify promising opportunities in the Dubai stock market. By staying informed, understanding the market trends, and seeking professional advice, investors can potentially reap significant returns on their investments in the vibrant and ever-growing Dubai financial landscape.
Investing and trading in the Dubai Financial Market (DFM) have never been easier thanks to brokerage companies like amana. With just a few simple steps, you can unlock access to Dubai stocks and start trading and investing in the UAE's vibrant market. Whether you're a local resident or a foreigner living somewhere else, the amana app allows you to participate in the DFM from almost anywhere in the world.
Before diving into the market, take the time to conduct thorough research on the companies you're interested in, stay informed about market trends, and consider seeking professional advice to maximize your investment potential. By leveraging the power of technology and conducting due diligence, you could embark on a rewarding investment journey in the Dubai Financial Market.