Banking and Finance
Banking and finance, real estate, and Adnoc entities stocks are expected to perform well this year, driven by their strong dividend payouts to shareholders.
Anita Gupta, head of equity strategy wealth management at Emirates NBD, emphasized that the UAE equity market is heavily influenced by dividend yields, a trend likely to persist in 2024.
“We expect 2024 to be a good year for banks. We may not see astronomical growth as in 2023, but we do expect dividend payouts to be maintained, which is very favorable for Dubai and Abu Dhabi banks. She stated during the launch of the 2024 outlook report in Dubai.
Gupta highlighted that most IPOs over the past three years in the UAE have offered dividends of over four percent, contributing significantly to their growth. She noted the exceptional performance of banks in the previous year. With earnings increasing by an average of 20-30 percent and some doubling their earnings. Improved net interest margins and economic strength facilitated banks to increase dividends.
Adnoc-Backed Companies
Gupta expressed confidence in Adnoc-backed companies listed on the Abu Dhabi bourse. Emphasizing their strong dividend-paying status and diversification potential beyond real estate and banking sectors.
Real Estate Developers
Real estate companies, particularly those in Dubai and Abu Dhabi. Are expected to have a prosperous year in 2024 due to robust project deliveries. Gupta anticipates these companies to offer attractive dividends, presenting a positive outlook for the real estate sector.
IPO Performance and Returns
Over the last three years, the UAE witnessed 19 IPOs across various sectors including retail. Energy, education, healthcare, and privatization of government entities in Dubai. These IPOs generated an average return of 46 percent, a notable contrast to global IPO performances.
Gupta attributed this sustained performance to the UAE companies’ emphasis on dividend yield. She highlighted that companies that increased dividends fared better in the market.
Economic Banking Outlook
Emirates NBD Research projects faster real GDP growth for the UAE. Dubai in the coming years. primarily driven by non-oil sectors. While the UAE’s economy is expected to grow slightly slower at 3.3 percent in 2024. It is forecasted to accelerate to 4.0 percent in 2025, led by non-oil sectors.
Similarly, Dubai’s economy is anticipated to maintain a growth rate of 4.0 percent in 2024. With a slight uptick to 4.5 percent in the following year.
