Emirates NBD: UAE Stocks 2024 Outlook
Emirates NBD, Dubai's largest bank, anticipates a robust performance from UAE stocks in 2024, particularly in the banking, real estate, and Adnoc sectors. According to Anita Gupta, head of equity strategy wealth management at Emirates NBD, the outlook is positive due to the consistent dividend payouts witnessed in recent years.
Gupta emphasized that the UAE equity market revolves around dividend yields, a trend expected to persist in 2024. While the growth may not reach the levels seen in 2023, she anticipates that dividend payouts will remain stable, especially in the banking sector of Dubai and Abu Dhabi. Last year witnessed exceptional performance from banks, with earnings increasing by an average of 20-30%, some even doubling their earnings. This was attributed to improved net interest margins and the strengthening economy, leading to increased dividends and provisions.
Speaking at the launch of the 2024 outlook report in Dubai, Gupta highlighted the success of IPOs over the past three years, with most offering dividends exceeding four percent. She emphasized that dividend yield is crucial for maintaining growth upside, contrasting the UAE's performance with other markets like India, where IPOs experienced initial growth followed by subsequent declines.
The sectors expected to perform well in 2024 include Adnoc-backed companies listed on the Abu Dhabi bourse, known for their strong dividend payments. Additionally, real estate developers in Dubai and Abu Dhabi are anticipated to see a positive year due to strong delivery performance, leading to promising dividends.
In the last three years, the UAE has witnessed 19 IPOs across various sectors, yielding an average return of 46%. Gupta attributes this success to the sustained dividend yield, distinguishing UAE companies from their global counterparts.
Emirates NBD Research forecasts that the UAE and Dubai's real GDP growth will accelerate in 2024, driven by non-oil sectors. While the UAE economy is expected to expand at a slightly slower pace of 3.3% in 2024, it is projected to pick up to 4.0% in 2025, led by a 4.7% expansion in non-oil sectors. Similarly, Dubai's economy is forecasted to grow at 4.0% in 2024, maintaining the same growth rate as the previous year, with an anticipated increase to 4.5% in 2025.
Overall, Emirates NBD's optimistic outlook underscores the resilience and potential of the UAE's economy and stock market, positioning it for continued growth and stability in the coming year.
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By- Sahiba Suri
By: Sahiba Suri
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