After a risky begin, world markets ended 2025 on a robust observe, boosted by the AI growth and features in European defence shares. UAE markets additionally carried out properly, 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 features 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 have 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 sturdy exercise throughout retail and company banking. Property-linked names reminiscent of 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.
Overseas inflows have been one other key theme. UAE equities continued to draw worldwide capital, helped by the nation’s safe-haven repute, 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 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. Charge 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 sturdy, with loans rising by double digits year-on-year in 2025. Banks stay properly 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 sturdy momentum, backed by inhabitants inflows and coverage help.
Sectors to observe 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 Business Financial institution and different giant establishments delivered wholesome earnings progress, supported by rising credit score demand, sturdy capital buffers, and regular curiosity margins.
As rates of interest edge decrease in 2026, margins might soften, however needs to be partly offset by larger lending volumes, charge revenue, and continued safe-haven inflows into the UAE. Returns could also be average 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 traders. Builders and property-linked names reminiscent of Emaar, Aldar, and Union Properties proceed to profit from sturdy 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. Nonetheless, larger valuations imply sturdy execution is a should.
Vitality and commodities
Vitality shares stay particularly necessary for Abu Dhabi. The 2026 outlook relies on 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 slender, 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 one in every 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 progress 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 gradual circulation of recent listings lately, together with government-related entities and family-owned companies.
Additional IPOs in actual property, logistics, utilities and tech might deepen markets and broaden alternatives for traders.
Dangers to think about
The UAE story is promising, however not with out dangers. A sustained decline in oil costs might 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 might influence commerce, tourism, and company earnings. With valuations excessive in areas like actual property and tech, delivering constant earnings can be much more necessary in 2026
Optimistic outlook for 2026
General, the UAE outlook stays optimistic. Financial progress is predicted to remain strong, inflation low, and coverage supportive. Banks are properly 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 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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