After a risky begin, international markets ended 2025 on a robust observe, boosted by the AI increase and positive aspects in European defence shares. UAE markets additionally carried out nicely, 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 aspects 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 high performers. In Abu Dhabi, banks and new economic 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 similar to Union Properties and Amlak Finance additionally benefitted from Dubai’s actual property cycle, supported by inhabitants progress, new visa pathways, and sustained curiosity from worldwide consumers.
International inflows had been one other key theme. UAE equities continued to draw worldwide capital, helped by the nation’s safe-haven popularity, regional hub standing, and a gradual pipeline of IPOs throughout each exchanges.
The macro backdrop
Heading into 2026, the UAE’s economic system stays on a supportive path. The nation is steadily shifting from oil dependence in the direction of a extra diversified economic system, with non-oil sectors now accounting for a considerable share of GDP.
The Central Financial institution of the UAE expects actual GDP progress 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 progress.
With the dirham pegged to the US greenback, UAE financial coverage usually follows the US Federal Reserve. Fee cuts in late 2025 affected the area, and whereas easing might gradual in early 2026, US coverage expectations stay a key issue for native markets.
Credit score progress has stayed robust, with loans rising by double digits year-on-year in 2025. Banks stay nicely capitalised, with low non-performing mortgage ratios.
Tourism, aviation, and logistics proceed to be main progress 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 massive establishments delivered wholesome earnings progress, 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 ought to be partly offset by greater lending volumes, payment 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 high theme for native buyers. Builders and property-linked names similar to Emaar, Aldar, and Union Properties proceed to profit from robust transaction volumes, inhabitants progress, and regular curiosity from worldwide consumers.
Mortgage prices are anticipated to ease regularly as rates of interest decline, supporting the broader actual property ecosystem. Nevertheless, greater valuations imply robust execution is a should.
Power and commodities
Power shares stay particularly essential for Abu Dhabi. The 2026 outlook relies on oil costs, OPEC+ coverage, and international demand.
Oil costs softened on the finish of 2025, which weighed on the ADX. Trying forward, demand is anticipated to enhance, and the projected surplus ought to slim, with OPEC sustaining a constructive 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 among ADX’s standout tech names, reflecting Abu Dhabi’s deal with information 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 operating in healthcare, finance, and media, protecting capital flowing into the sector and providing buyers a progress 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 gradual stream 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 increase alternatives for buyers.
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, at the same time as non-oil diversification continues.
World progress stays unsure, particularly in Europe and China. A sharper slowdown may affect commerce, tourism, and company earnings. With valuations excessive in areas like actual property and tech, delivering constant earnings shall be much more essential in 2026
Optimistic outlook for 2026
Total, the UAE outlook stays constructive. Financial progress is anticipated to remain stable, inflation low, and coverage supportive. Banks are nicely capitalised, capital markets are deepening, and the nation continues to draw overseas funding and expert labour.
Earnings progress throughout banking, actual property, vitality and know-how ought to proceed to help fairness buyers, even when returns are extra measured than earlier increase years. The UAE’s stability, ongoing diversification and deal with innovation strengthen its funding case heading into 2026.
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This communication is for info and schooling functions solely and shouldn’t be taken as funding recommendation, a private advice, or a proposal 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 should 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.
