What is the Stock Market?
A stock market is a place where stocks(shares) of a particular organization are traded. Companies split their shares and trade them, where the public can buy or sell the stocks. The investors gain a certain amount of profit if the company does well as they own a part of the company. In order to gain a decent amount of profit, it is recommended to go for a long term investment like at least more than 5 years.
To make investors buy stocks, companies have to list themselves at a stock exchange. Most of the high scale companies will have their stocks listed at the stock exchange.
UAE Stock Market is quite similar to any other stock market in the world. Well, known companies like Emirates NBD, Oman Insurance Company, Emaar Properties, and 200 more public limited companies are listed at the stock exchange houses in UAE. The stock exchange centers in UAE, allows international companies as well to register and make their stocks available to everyone.
Stock Exchange centers in UAE
There are 3 stock exchange centers in UAE. Dubai Financial Market(DFM), Abu Dhabi Securities Exchange(ADX) and NASDAQ Dubai.
Dubai Financial Market(DFM)
DFM is the first stock exchange center in UAE. It was established in early 2000. It has more than 170 companies listed with them. Even though the DFM market had some fluctuations in the profits, it has experienced a high profit in the year 2007. It was recorded about 1439.6 Million. DFM operates on the basis of Islamic principles which means companies that are against sharia laws will not be approved.
Since 2010, DFM is working on UAE regulations that are governed by Securities and Commodities Authority(SCA). It works with 5 core values like transparency, efficiency, confidentiality, integrity, and innovation.
Companies listed on DFM:
There are several companies registered at DFM. It approves all the sectors and organizations that follow sharia principles. Here’s a list of companies on DFM
- Ajman Bank
- Commercial bank of Dubai
- Dubai Islamic Bank
- Gulf Finance House
- Mashreq bank
- Emirates NBD
- SHUAA Capital
- Dubai Investments
- Oman Insurance Company
- Emaar Properties
- Air Arabia
Abu Dhabi Securities Exchange(ADX)
ADX was established in November 2000. It trades the stocks of UAE companies. It has branches in Ras Al Khaimah, Al Ain, Fujairah, and Sharjah. It trades companies from different sectors like banking, insurance, services, industries & hotels. It works with values like transparency, integrity, efficiency and customer-centric.
Companies registered on ADX:
- Finance House
- Union National Bank
- Noor Takaful
- Qatar Telecommunications
- Gulf Pharmaceutical Industries
NASDAQ Dubai trades stocks of local and international companies as well. The majority of stocks at NASDAQ Dubai are held by DFM. It is located in the Dubai International Financial Center(DIFC). It has the top valued companies listed for trade.
Some of the companies listed on NASDAQ:
- Bank of London and the Middle East(BLME)
- Real Estate Investment Trust(REIT)
How to Invest in the Stock Market?
You can buy stocks in UAE by following a simple procedure,
- Register for Investor Number(NIN)
- Get a broker
Step 1: Registration for Investor Number(NIN)
- Fill the Investor Number form that is provided online
- Attach required documents like Passport, Family book(UAE Nationals), Residential Visa(UAE Residents) and UAE National ID(UAE Residents)
- Submit the documents online at http://www.dfm.ae/ or can submit at the World Trade Center, CSD Client services affairs desk or through a licensed DFM or NASDAQ broker
- The NIN is provided for free on no charges and it is provided instantly once the application is approved
Step 2: Get a broker
- Once you get an investor number(NIN), visit a brokerage firm that is registered at DFM or NASDAQ. You can find Stock Brokers in UAE and register with them.
- Open a trading account
Step 3: Trade
After getting a NIN and trading account, you can start buying/selling stocks with the help of a licensed broker.
Step 4: Track
Use the credentials provided by the broker and track the Sensex of the stocks of the company.
Also, Check: Different investment options for Expats in Dubai
Eligibility criteria for an investor to buy stocks in UAE:
- Non-Residents are also eligible
- Applicants must have a valid passport
- Must have an Investor Number(NIN)
- Must have a trading account
- Minors below 21 yrs are eligible with the guardian’s signature on the applications
UAE Government welcomes everyone to buy/sell stocks from their exchange centers. The stock market is volatile and it is recommended to research properly before buying any stock. It is a must to have some local knowledge before buying or selling any share. Continuous tracking and keeping yourselves updated helps in gaining profits in the stock market.