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Last week, ADX and DFM contributed to 20 percent of Arab exchanges’ liquidity.

by Swati Gupta

April 22, 2023 8

In the world of finance, the term liquidity refers to the ease with which an asset can be converted into cash without affecting its market value. It’s a crucial factor in the functioning of any financial market. As such, it is always of interest to keep track of the liquidity of financial markets.

Last week, the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) contributed to 20 percent of the total liquidity of Arab stock exchanges. This is a significant figure, as it highlights the strong performance of the UAE stock markets in the region.

The ADX contributed AED 6.26 billion (USD 1.7 billion) to the total liquidity of Arab stock exchanges last week. Meanwhile, the DFM contributed AED 3.92 billion (USD 1.1 billion). Together, they accounted for 20 percent of the total liquidity of Arab exchanges.

The strong performance of the UAE stock markets last week can be attributed to a number of factors. One of the main reasons is the positive sentiment in the region’s financial markets, fueled by the ongoing recovery from the COVID-19 pandemic. Investors are more confident in the outlook for the region’s economies, which has led to increased investment in the stock markets.

Another factor that contributed to the strong performance of the ADX and DFM is the high level of transparency and regulation in the UAE financial markets. Investors have confidence in the integrity of the markets and the protection of their investments, which has led to increased investment activity.

The ADX is the second-largest stock exchange in the UAE, after the Dubai Financial Market. It lists more than 70 companies across a range of sectors, including banking, energy, and real estate. The DFM, on the other hand, is the first and oldest stock exchange in the country. It lists more than 60 companies across various sectors, including finance, real estate, and transportation.

Both exchanges have taken steps in recent years to improve their technology and infrastructure, making it easier for investors to trade and access information.