The Abu Dhabi Securities Exchange, or ADX, commands a dominant position in Arab finance from its location in Abu Dhabi, the capital city of the United Arab Emirates (UAE). As the UAE’s largest and the Arab region’s second-largest stock market, the Abu Dhabi Securities Exchange provides a hub for investment in listed public companies on its main general index, and a platform for trading securities in private joint-stock companies through its parallel second market.
This investing guide will provide an overview of the ADX and cover the most important things to know before you start trading on the UAE’s leading stock exchange. We also list the top ADX brokers in 2022.
Abu Dhabi Background
Oil wealth has propelled Abu Dhabi through a period of rapid development since the UAE gained independence from the UK in 1971, and today this Gulf capital boasts an impressive array of features and amenities including a world-class airport, luxury hotels, and shopping malls filled with international brands’ stores.
Abu Dhabi is the regional centre for government as well as financial institutions including the First Abu Dhabi Bank – the largest Emirati bank – and the Abu Dhabi Securities Exchange. As the UAE’s capital city, financial hub, and the home of cutting-edge sports, cultural and entertainment venues, Abu Dhabi’s profile has been rising internationally both as a holiday destination and a location to build lucrative careers.
Abu Dhabi’s path to development has been fuelled by fossil fuel wealth generated from the UAE’s vast reserves through the activities of the Abu Dhabi National Energy Company, TAQA. However, a glance at local job boards, business journals and financial news sources reveal the presence of booming construction, service, communications and financial sectors.
Investing In The ADX
The Abu Dhabi Securities Exchange is a gateway for investors to access this dynamic, rapidly growing market. Over two decades of sustained growth since its foundation, the ADX’s performance has reflected Abu Dhabi and the UAE’s move from an oil-based to a more diverse economy.
The Abu Dhabi Securities Exchange has steadily gained recognition from international financial institutions as it met regulatory standards, winning it emerging market status on leading indices including S&P Dow Jones and FTSE.
It has also made moves to follow international norms on sustainability, publishing its first sustainability report and issuing Environmental, Social and Governance guidance to companies in 2020.
History & Constituents
Founded in 2000, the Abu Dhabi Securities Exchange is the leading exchange in the UAE with a market capitalization of more than $530 billion in 2022. This makes the ADX the second-largest regional stock exchange after Saudi Arabia’s Tadawul, and it is considerably larger than local competitors the Dubai Financial Market and Nasdaq Dubai.
The Abu Dhabi Securities Exchange lists 73 companies in its issuers directory, representing a broad swathe of the Emirati banking, energy, construction, insurance and service sectors. This list mainly comprises local public joint-stock companies which can be traded on the ADX’s main market, but it also includes twelve private equity companies established in the UAE that trade on the parallel second market.
Major players on the Abu Dhabi Securities Exchange include:
- International Holding Company – conglomerate owned by UAE monarchy
- Aldar Properties – the ADX’s largest real estate developer
- TAQA – Abu Dhabi’s national energy holding company
- First Abu Dhabi Bank – the UAE’s largest bank
- Etisalat – multinational telecom provider
These companies alone account for a large proportion of the Abu Dhabi Securities Exchange’s market cap, and it is well worth keeping up to date with their financial statements to give you an idea of the market direction.
The International Holding Company, which is owned through the Royal Group by members of the UAE’s monarchy, is of special interest as it is both the largest company listed on the ADX and the owner of subsidiary companies, such as tech firm Multiply, which are also listed.
Since its inauguration in 2000, the ADX has hit a number of significant milestones:
- 2007: average daily trading volume rises by 400 percent amid an influx of foreign investment
- 2008: the Abu Dhabi Securities Exchange rebrands from ADSM to ADX and inaugurates its new logo
- 2009: FTSE promotes ADX to emerging market status
- 2011: ADX gains emerging market status with S&P and Russell Investments
- 2014: S&P Dow Jones and MSCI promote ADX to emerging market status
- 2020: ADX issues first sustainability report and issues listed companies with ESG guidance
- 2021: ADX launches derivatives market
- 2022: ADX and FTSE Russell announce index partnership
How To Trade On The Abu Dhabi Securities Exchange
Day trading is legal in the UAE, and foreign investors including non-residents are welcome to invest in the ADX and other Emirati exchanges, though there are several things you need to know in order to start trading:
- Investors typically buy and sell securities on the ADX through an online broker.
- All investors are required to obtain an investor number before trading on the ADX.
- Investor numbers are available for Emirates ID card holders through the Sahmi digital platform.
- You can also obtain an investor number from accredited brokers or from customer service offices at ADX branches.
- Individual investors who do not have an Emirates ID card will need a passport, ID card, and the IBAN of a personal bank account to obtain an investor number.
- Companies must present a valid trade licence contract, company incorporation contract and other documentation for their investor numbers.
A winning trading strategy requires thorough research, and the best first step before making any trades on the Abu Dhabi Securities Exchange is to familiarize yourself with the index’s historical performance as well as the companies listed on it.
You can get a general idea about the state of the ADX by researching the FTSE ADX Index Series. The index series, developed in partnership with FTSE Russell, provides daily index calculations on all listed companies on the ADX General Index. It also provides ten sector-specific indices based on the Industry Classification Benchmark, as well as the FTSE ADX 15, an index based on the top 15 companies listed on the ADX. It is a good idea for investors to supplement their research of these indices by studying financial statements and annual and quarterly reports from any specific companies which catch their eye.
One thing to bear in mind while trading on the ADX is that with just 73 listed companies, this is a relatively small index that is dominated by a handful of big players. As a result, the index will be disproportionately affected by the performance of the largest companies. For example, the International Holding Company and First Abu Dhabi Bank, the two largest companies on the index, account for more than a quarter of the index’s value based on market capitalization in 2022. Studying the specific indices by sector will give you a clearer picture of performance indicators if you want to trade in smaller companies.
You should also note that, as the primary stock exchange for a Gulf state which has historically depended on oil wealth, the ADX’s market dynamics have largely been shaped by developments related to fossil fuels.
This is not to say that the ADX’s price has simply followed oil prices. In fact, the impressive performance of the ADX since its foundation in 2000 has depended more on the influx of large amounts of Foreign Direct Investment, which has flowed steadily into the UAE since 2010 as the result of an intense programme of reforms aimed at diversifying the economy away from hydrocarbons.
Nevertheless, large oil and gas reserves continue to underpin the UAE’s economy, and this might explain the ADX’s buoyant performance since Russia launched its invasion of Ukraine in February 2022. While major international stock exchanges have faltered since the invasion, the ADX reached an all-time high above 10,000 in March 2022, after plunging to an eight-year low of around 3,600 at the height of COVID-19 induced panic in March 2020. Higher oil prices are likely to bring more revenues to the UAE, and this may well be reflected in significant upticks in investment in various sectors such as construction.
So, keeping a close eye on developments that may affect hydrocarbon prices and FDI in the UAE will form an essential part of the strategy both for long-term investors and for traders looking to profit from shorter-term price movements.
The Abu Dhabi Securities Exchange is open Monday through Friday, with the trading day divided into four stages during which buy and sell orders can be entered:
- Pre-trading session – 09:30–09:59 GST
- Continuous trading session – 10:00–14:44 GST
- Pre-closing session – 14:45–14:54 GST
- Trade at last session – 14:55–15:00 GST
The ADX’s opening hours are in Gulf Standard Time (UCT + 4), and it is worth keeping in mind that the exchange is only open on weekdays.
As an Islamic country, many of the United Arab Emirates’ national holidays are based on the Islamic calendar and will change from year to year in relation to the commonly used Gregorian calendar. Make a note of the dates of Eid al-Fitr and Eid al-Adha if you plan to trade on the Abu Dhabi Securities Exchange this year, as markets will be closed throughout these holidays.
Other holidays which affect the Abu Dhabi Securities Exchange include:
- January 1 (New Year’s Day)
- December 1 (Commemoration Day)
- December 2–3 (National Day)
Final Word On Trading The ADX
The Abu Dhabi Securities Exchange is home to some of the largest companies in the Middle East. And while the country and economy have historically been dependent on oil, foreign investment, among other factors, now play a key role. Use our guide above to start trading on the ADX and see our list of supporting brokers here.
Who Owns The Abu Dhabi Securities Exchange?
The ADX is wholly owned by the Abu Dhabi Developmental Holding Company PJSC, a state-owned development holding company which Abu Dhabi’s government established in 2018.
Where Is The Abu Dhabi Securities Exchange Located?
The main headquarters of the ADX is found in the Landmark Tower on Al Hisn Street in the Abu Dhabi city centre. Branches of the ADX can also be found in Al Ain and Sharjah.
Is The Abu Dhabi Securities Exchange Regulated?
The ADX is regulated by the Securities and Commodities Authority, a federal authority established by the UAE government in 2000 to oversee markets. The SCA reports directly to the UAE’s economy minister.
Who Manages The Abu Dhabi Securities Exchange?
The ADX’s Managing Director and CEO is Saeed Hamad al-Dhaheri, who joined from TAQA where he was a Deputy CEO. The CFO, David Nevin, joined from the Intercontinental Exchange, where he served most recently as Group Finance Director of EMEA. The ADX’s board of directors is headed by chairman H.E. Hisham Khalid Malak, who also serves as undersecretary in Abu Dhabi’s Department of Finance.
What Is The Best Way To Contact The Abu Dhabi Securities Exchange?
The easiest way to reach the ADX is through its website, which includes a section listing its contact number and a live chat option. It also allows users to write messages directly to the ADX’s customer service officers through the website, though it does not list an email address. You can also follow the Abu Dhabi Securities Exchange through its Twitter account.