What is the Stock Market?
A stock exchange may be a place where stocks(shares) of a specific organization are traded. Companies split their shares and make them available on the stock exchange, where the investors get access to invest in these shares, where the general investors can purchase or sell the stocks. The investors gain a neighbourhood ocular amount of profit if the corporate does well, as they own a part of the corporate. To realize an honest amount of profit, it’s recommended to travel for a long-term investment, like a minimum of 5 years.
To make investors buy stocks, companies need to list themselves on a stock market. Most high-scale companies will have their stocks listed on the stock market.
The UAE stock exchange is almost like the other stock exchange globally. Well-known companies like Emirates NBD, Oman insurance firm, Emaar Properties, and 200 more public limited companies are listed in the stock market houses in UAE. The stock exchange centre in UAE allows international companies to register and make their stocks available to everyone.
Stock Exchange centres in UAE
There are 3 stock exchange centres in UAE.
Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX) and NASDAQ Dubai.
- Dubai Financial Market (DFM)
DFM is the first stock exchange centre in UAE. It was established in early 2000. It has quite 170 companies listed. Even though the DFM market had some fluctuations in profits, it experienced a high profit in 2007. It was recorded at about 1439.6 million. DFM operates on Islamic principles, which suggests companies against sharia laws won’t be approved.
Since 2010, DFM has been functioning on UAE regulations governed by the Securities and Commodities Authority (SCA). It works with 5 core values 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 an inventory 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
NASDAQ Dubai trades stocks of local and international companies also. DFM holds the majority of stocks at NASDAQ Dubai. It is located within the Dubai International Financial Centre (DIFC). It has the highest valued companies listed for trade.
Some of the companies listed on NASDAQ:
- Bank of London and thus the centre East (BLME)
- Real Estate Investment Trust (REIT)
How to Invest in the Stock Market?
You can buy stocks in UAE by following an easy procedure,
- Register for Investor Number (NIN)
- Get a broker
Step 1: Registration for Investor Number (NIN)
- Fill out the Investor Number form that’s 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 them at the planet Trade Centre, CSD Client services affairs desk or through a licensed DFM or NASDAQ broker.
- The NIN is provided free of charge no charges, and it’s provided instantly once the appliance is approved.
Step 2: Get a broker.
- Once you get an investor number (NIN), visit a registered brokerage at DFM or NASDAQ. You can find Stockbrokers in UAE and register with them.
- Open a trading account.
Step 3: Trade
After getting a NIN and trading account, you’ll start buying/selling stocks with the assistance of a licensed broker.
Step 4: Track
Use the credentials provided by the broker and track the Sensex of the corporate stocks.
Eligibility criteria for an investor to shop for 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 centres. The stock exchange is volatile, and it’s recommended to research properly before buying any stock. It is required to possess some local knowledge before buying or selling any share. Continuous tracking and keeping yourself updated helps gain profits within the stock exchange.