ADX’s market liquidity jumps five-fold in 2021 amid IPO boom. Traded values (buy + sell) on the exchange increased 407% from AED 145 billion in 2020 to AED 739 billion in 2021, driven by higher levels of domestic and international investment. Local investors accounted for 70% of the exchange’s traded value, while foreign institutional investors accounted for 30%.
Meanwhile, net foreign investment on the exchange reached AED 15 billion in 2021, the highest level recorded in the exchange’s history. The market value of shares owned by foreign investors in 2021 increased by 100% from AED 78 billion to AED 156 billion, while those held by UAE nationals reached AED 1.5 trillion compared to AED 685 billion in 2021, an increase of 117%. At the same time, the number of new investors who registered on the exchange in 2021 increased by 701% from 2,362 in 2020 to 18938 in 2021. The number of new institutional investors increased 77% to 708 in 2021 versus 400 in 2020.
The increased demand for Abu Dhabi stocks helped propel the exchange’s benchmark index 64% higher, making the measure one of the world’s best-performing equity gauges in 2021. Meanwhile, the market capitalization of stocks listed on the ADX more than doubled to a record AED 1.6 trillion.
Underpinning the exchange’s bumper year has been the roll out of the ‘ADX One’ strategy, announced at the beginning of 2021. The strategy comprises 22 initiatives to bolster corporate governance and meet the evolving needs of global issuers and investors. As part of the strategy, the ADX introduced a derivatives market in the fourth quarter, which paved the way for an agreement with FTSE Russell to develop co-branded indices, including a tradable FTSE ADX Blue Chip Index that will be launched in 2022. The exchange has also established a framework for listing Special Purpose Acquisition Company (SPAC) on ADX, which was approved by the Securities and Commodities Authority (SCA) in January.
Furthermore as part of the ‘ADX One’ strategy, the exchange forged several partnerships with global stock markets in 2021, sealing agreements with Bahrain Bourse, Bursa Istanbul, and Astana International Exchange to unlock direct market opportunities and enhance cooperation through information exchange. The exchange also moved to new premises in the Landmark building on Abu Dhabi’s Corniche, unveiled its new brand and introduced an investor relations and sustainability guide books.
The exchange’s historic performance in 2021 was supported by ADX’s efforts to attract issuers to the main and Second Market. In 2021, the ADX welcomed nine companies to the exchange, including ADNOC Drilling, the biggest IPO in the exchange’s history, Alpha Dhabi, the real estate and construction company owned by International Holding Company (IHC), and Yahsat, the satellite operator owned by Mubadala Investment Company, and Fertiglobe. Six debt instruments and an Exchange Traded Fund (ETF) were also added on the exchange in 2021, bringing the number of publicly listed companies to 69, debt instruments to 27, private companies to 13 and ETFs to two.