UAE Equity Markets poised for strong growth in 2026

Resilient Macroeconomic Foundation

The UAE has demonstrated remarkable resilience against global uncertainties and regional conflicts. UAE’s Real GDP growth is set to accelerate to 5.0% in 2026, driven by stronger hydrocarbon sector growth of 6.3% and non-hydrocarbon sector expansion of 4.6%. Growth momentum is underpinned by continued expansion in tourism, construction, and financial services complemented by large infrastructure investments. A favorable inflation environment, projected at 2.0% for 2026, combined with a credible monetary anchor via the U.S. dollar peg, continues to bolster investor confidence.

This economic strength is further reflected in the 2026 federal budget, which sets expenditures at AED 92.4 billion, the largest in the nation’s history, prioritizing social development, infrastructure, and sustainable finance. The UAE’s external position remains robust, with the current account surplus projected at 12.3% of GDP in 2026, reflecting the success of ongoing diversification efforts. The expansion of Comprehensive Economic Partnership Agreements (CEPAs) is expected to further strengthen external resilience.

ADX: Broad‑Based Growth Across Emerging and Established Sectors

Following a year when the Abu Dhabi market delivered a 6.1% return, the outlook for 2026 remains optimistic. Corporate earnings in Abu Dhabi are projected to grow by 9.4% in 2026, with the real estate sector expected to lead this expansion. While the financial sector faces a neutral outlook due to anticipated rate cuts compressing margins, steady credit growth and stable asset quality are expected to provide a balance of income and growth. Furthermore, the technology sector is positioned for long-term growth, structurally supported by the National Strategy for Artificial Intelligence 2031, which is driving significant investment in the digital sector.

ADX valuations remain attractive with a PE ratio of 15.5x in 2025, below the five-year average of 17.5x and a dividend yield of nearly 3%.

DFM: Strong Momentum and High Dividend Yields 

The Dubai Financial Market entered 2026 on the back of a stellar 17.2% return in 2025, significantly outperforming many regional peers. DFM earnings are forecast to grow by 10.0% in 2026, primarily driven by the real estate and industrial sectors. The real estate market continues to benefit from robust demographic trends and international buyer interest, with the Dubai Real Estate Price index posting a 39.2% annualized return over the past five years. (Read Marmore’s report on Dubai Real Estate Market here.)

Dubai’s equity market is particularly noted for its high dividend yields, at 5.0% in 2025, which provides a substantial income buffer for investors. DFM’s valuations remain reasonable, with a P/E multiple of 10.5x in 2025.

Navigating Risks 

Across both markets, the financial sector is preparing for balanced dynamics as interest rate cuts track the U.S. Federal Reserve. The energy sector faces a more subdued outlook due to softening oil price expectations, with Brent crude projected to average at USD 55 per barrel amid global oversupplies.

While the overall assessment for both ADX and DFM is positive, there are selective risks, including prolonged oil price declines, execution risks associated with large-scale diversification projects, and global geopolitical uncertainties.

To read the full ADX and DFM 2026 Outlook reports and access more published insights, visit Macro & Markets GCC - Abu Dhabi Outlook - January 2026 and Macro & Markets GCC - Dubai Outlook - January 2026