After a risky begin, international markets ended 2025 on a robust notice, boosted by the AI increase and good points 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 lively buying and selling and new listings, outperforming the S&P 500. Abu Dhabi’s ADX noticed extra modest good points 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 prime 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 fame, regional hub standing, and a gentle 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 assist 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 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 Business Financial institution and different massive 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, price earnings, 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 buyers. 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 step by step 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 will depend on oil costs, OPEC+ coverage, and international 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 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 certainly one of 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 working in healthcare, finance, and media, retaining 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 gentle circulate 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, whilst non-oil diversification continues.
World progress stays unsure, particularly in Europe and China. A sharper slowdown may influence commerce, tourism, and company earnings. With valuations excessive in areas like actual property and tech, delivering constant earnings might be much more necessary in 2026
Optimistic outlook for 2026
Total, the UAE outlook stays constructive. 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, power and know-how ought to proceed to assist 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 data 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 considering any specific recipient’s funding targets or monetary scenario, and has not been ready in accordance with the authorized and regulatory necessities to advertise impartial analysis. Any references to previous or future efficiency of a monetary instrument, index or a packaged funding product aren’t, 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.
