85% Of UAE Retail Investors Show Strong Support For Local Stocks Amid Global Trade Tensions

In the UAE, a significant 85% of retail investors are currently engaged in local stock markets, with many increasing their investments due to global trade tensions. This insight comes from the UAE Retail Investor Beat by eToro, which surveyed 1,000 investors across the nation. The survey highlights strong support for local equities, with 39% investing in Abu Dhabi stocks, 28% in Dubai stocks, and 18% holding both.

Despite geopolitical concerns, UAE investors remain optimistic about their local market. A substantial 63% express being "very confident" in the current economic performance, while another 29% are "somewhat confident." Looking ahead, 59% are "very confident" about long-term stock performance, with an additional 32% feeling "somewhat confident."

Trade tensions have prompted 90% of investors to anticipate significant impacts on their portfolios within six months. Consequently, 89% have adjusted or plan to adjust their investments. Many are increasing exposure to UAE equities (53%) and commodities (51%), viewing gold and precious metals as resilient assets during volatile times.

George Naddaf, Managing Director at eToro MENA, commented on these findings: "The DFM and ADX are among the best-performing stock exchanges in the world this year, outperforming the S&P 500 by a considerable margin. Against this backdrop, our research confirms that investor confidence in the UAE market remains strong, supported by resilient performance across local indices, solid macroeconomic indicators, and sustained earnings across key sectors."

Real estate is seen as the most promising sector for investment over the next year by 55% of respondents. Technology follows closely at 48%, while financial services and energy each attract interest from 37%. These preferences align with government-backed initiatives supporting these industries.

Looking forward to the next five years, 58% of investors believe that the Middle East will yield substantial returns. The U.S. follows closely behind with expectations from half of those surveyed. This long-term optimism reflects a strategic focus on regions perceived as offering robust growth potential.

Adaptability in Investment Approaches

Naddaf further noted: "With 90 percent of investors anticipating an impact from tariffs and trade wars, and 89 percent adjusting their portfolios accordingly, UAE investors show an impressive level of adaptability." This adaptability includes reallocating towards commodities like gold and oil as hedges against external volatility.

The survey also reveals that crypto is a popular asset class among UAE investors. Currently, it is held by 54%, making it the most owned asset type. In a volatile trade environment, crypto ranks second after precious metals as a preferred choice for resilience.

Despite uncertainties, investor activity remains robust. Over recent months, 65% have increased contributions to their portfolios. Looking ahead three months, an even larger proportion—76%—plan to boost their investments further.

This ongoing commitment to investing underscores confidence in navigating challenges while capitalising on opportunities within both local and global markets.

With inputs from WAM