Before trading, please ensure that you fully understand the risks involved
- About Us
- Contact Us
Saturday, March 26, 2022
Zawya - UAE - Can expats buy shares in listed companies?
UAE - The Dubai Electricity and Water Authority (Dewa) on Thursday announced the launch of its initial public offering (IPO) to raise up to Dh8.06 billion, which is also open for expats in the UAE.
The share has been priced at a very attractive and competitive range of Dh2.25 to Dh.48 to bring in the maximum number of investors in the IPO. Since Dewa enjoys the sovereign backing of the Dubai government, the IPO will also attract a lot of small investors who generally prefer to invest their savings in stable stocks such as Dewa.
The utility services provider is not the first company to offer share sales to expatriates in the UAE. The UAE’s bourses — the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) — allow any individual or institution to apply for an Investor Number to trade on the two bourses.
Barring a few companies which have not yet allowed expatriates to buy shares, most of the blue-chip companies listed on the DFM and the ADX allow expatriates to buy their shares.
Blue-chip firms such as Emaar, Emirates NBD, Dubai Islamic Bank, du, etisalat, Mashreq, Aramex, Air Arabia, First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, RAK Bank, Aldar Properties and others allow foreigners to own shares in the company up to 49 per cent.
Mohamed Shaheen, CEO, Seven Capitals, stated that the DFM and the ADX are open to investors of any nationality based in any country.
“Any individual or institution can apply for an Investor Number (NIN) with the Dubai CSD in order to trade on the DFM. In fact, the ADX recorded a surge in liquidity and foreign investment in 2021 on the back of new listings.
The UAE government welcomes everyone to buy/sell stocks from their exchange centres,” he said.
However, Mohamed Shaheen advised new investors that 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.”
Importantly, all exchanges across UAE provide real-time access to digital services through their integrated digital platforms which enable investors to access many digital services, most notably updating investors' data, inquiring about dividends, transferring securities, and accessing various reports.
These exchanges are governed by global laws and backed by the UAE government with full transparency and governance.
How can expats buy UAE shares?
The Dubai Financial Market and Nasdaq Dubai (which trades in dollars) are open to investors of any nationality based in any country. Any individual or institution can apply for an Investor Number (NIN) with the Dubai CSD in order to trade both DFM and Nasdaq Dubai-listed securities.
Investors interested in trading on the DFM can apply for an investor number through the DFM app and the DFM’s website. They can submit required documents and register and get the username and password. The investor will receive the Investor Number through SMS. Otherwise, investors can also go and submit required documents in-person to get an Investor Number. People can also approach a DFM licensed brokerage, and they will obtain an Investor Number on their behalf by filling Investor Number Request Form and attaching supporting documents.
To buy and sell shares on the Abu Dhabi Securities Exchange (ADX), investors can apply for the issuance of an investor number through the Sahmi digital platform (for Emirates ID cardholders), accredited brokerage firms, or customer service offices at all branches of the ADX.
Individual investors wishing open an account with the ADX are required to submit Emirates ID card, bank account details and a form.
Popular stocks among expats
Why expats should invest
Anurag Chaturvedi, vice-chairman of the Institute of Chartered Accountants of India (ICAI) – Dubai chapter, said as the UAE government encourages a lot of privately held family groups and government-owned entities such as Dewa and others to go for the IPO so that nationals and expatriates can become part of the growth story.
“This creates a win-win situation for both the investor and investee. An investor can participate in the growth of listed entity by infusing the liquidity while making an earning in the form of dividend whereas investee can leverage liquidity for the growth and sustainability,” he said.
Chaturvedi noted that global investors will likely come to the UAE who are shifting away from the mainstream economies in Europe, the US and other saturated markets and invest in these emerging markets to reap the initial benefits of the IPO.
“However, it’s important for investors to do detailed research on sector, security and duration of the investment before making any decision,” he added.
A step-by-step guide to open an account with DFM and ADX
* Fill out the Investor Number form 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 Centre, CSD Client services affairs desk or through a licensed DFM or Nasdaq broker
* The NIN is provided for free and is provided instantly once the application is approved
* Once you get a NIN, visit a brokerage firm that is registered at DFM or ADX.
* Open a trading account
After getting a NIN and trading account, you can start buying/selling stocks with the help of a licensed broker.
Use the credentials provided by the broker and track stocks online.
Top Dubai-listed firms and foreign ownership company, and how much foreign ownership is permitted
1. Emaar 49%
2. Emirates NBD bank 40%
3. Mashreq bank 49%
4. Air Arabia 40%
5. Du 49%
6. Shuaa 49%
7. Tabreed 49%
8. Union Properties 49%
9. Dubai Islamic Bank 40%
10. DFM 49%
Top Abu Dhabi-listed firms and foreign ownership company and how much foreign ownership is permitted
1. First Abu Dhabi Bank 40%
2. Abu Dhabi Commercial Bank 40%
3. Abu Dhabi Islamic Bank 40%
4. Abu Dhabi National Insurance 25%
5. Bank of Sharjah 30%
6. Sharjah Islamic Bank 40%
7. RAK Bank 40%
8. Abu Dhabi Ports Co. 49%
9. Adnoc Distribution 49%
1o. Etisalat 49%Source: