You can buy stocks in UAE through a online stock broker, a full service stockbroker or directly with the company (through over the counter exchange) who is selling the stocks. The process of buying stocks is as simple as opening a bank account and can be done 100% online. You open a brokerage account with an online broker like eToro within half an hour by filling in your personal details, verifying your identity, and making your first deposit. You can then invest in stocks of individual companies online by opening a trade.
In this guide, we break down how to buy stocks in UAE.
How Does the UAE Stock Market Work?
The stock market works as a publicly available exchange where investors and traders buy and sell shares of companies. Investors become partial owners of the companies they invest in and receive dividends and profits when the companies perform well. On the UAE stock market, well-known companies are traded like Emirates NBD, Oman Insurance Company, and Emaar Properties.
Which Stocks Can You Buy?
There are common stocks, (convertible) preferred stocks, new equity issues, hybrid stocks, and Rule 144 stocks. Apart from these types of stocks, there are stock derivatives which are financial instruments of which the underlying asset is a share’s price. The most common stock derivatives are futures and options.
- Common Stocks – Common stocks are units of ownership in a company that include voting rights.
- Preferred Stocks – Preferred stocks usually don’t have voting rights but owners of these stocks will receive dividend payments before other shareholders.
- Convertible Preferred Stocks – Holding these stocks gives you the option to convert preferred stocks to common stocks.
- New Equity Issues – These stocks are different from the previously issued stocks and usually don’t have voting rights and cannot be resold for a certain amount of time.
- Hybrid Stocks – Hybrid stocks have the benefits of fixed returns and voting rights and are a combination of preferred stocks and common stocks. Hybrid stocks often have other ticker symbols than common stocks.
- Rule 144 Stocks – These stocks are subject to rule 144 of the Securities Exchange Commission in the USA: Selling Restricted and Control Securities, which means investors buy these stocks through private sales from the issuing company. Investors can only sell Rule 144 stocks when certain commissions are met.
- Stock Futures – With stock futures, buyers go long and sellers go short which means that the buyers take the obligation to buy a stock at the maturity date whilst the sellers take the obligation to sell. Stock futures are cash-settled.
- Stock Options – A stock option is the right to buy (call) or sell (put) a stock at a certain date in the future at a fixed price.
How To Invest In The UAE Stock Market – 5 Quick Steps
- Get your NIN number
- Select an online stockbroker
- Pick a stock
- Open a trade
- Optimize your portfolio
Step 1: Get Your Own Investor Number (NIN)
In order to buy stocks in UAE, you need to register for a Investor Number (NIN) by filling out this form here. You will need to submit proof of identity by uploading a photo of your passport or family book, and submitting the documents to http://www.dfm.ae, the World Trade Center, or the CSD CLient services affairs desk. It is free to register your Investor Number.
Step 2: Selecting an Online Stockbroker
The easiest way to invest in UAE stocks is through an regulated online brokerage account. Setting up an account is fast and simple and can be done 100% online. We recommend selecting an online stockbroker from our list of recommended stock brokers in UAE. The best online stockbrokers for UAE traders are eToro, AvaTrade, Saxo Bank and Interactive Brokers.
You can also buy stocks directly from the company or through a full service broker. This will result in additional fees and charges. If you are searching for other options to buy stock we recommend to check our list of the most recommended platforms for UAE users.
Step 3: Pick a Stock to Invest In
When you have your online trading account ready, you log into it and pick a stock to invest in. You do this by comparing companies and selecting the one you want to own shares in.
Step 4: Open a Trade
Once you have decided which stock you want to invest in, you search for it at your broker and open a trade by buying or selling (shorting) the stock. In the pop-up that shows up you enter how much you want to invest, the direction of the trade, and what risk management settings you want to apply. You can choose to take profit at a certain price, take a loss at a certain price, etc.
Step 5: Optimizing Your Portfolio
You optimize your portfolio by investing in stocks that will generate income and build up wealth over the long term. It is smart not to invest all your money in one stock, but to diversify your portfolio over multiple asset classes like mutual funds, commodities, and ETFs.
*Additional UAE Investor Requirements
To be able to invest in stocks as UAE resident you must have in addition to the above criteria a valid passport and be at least 21 years old. Minors can invest in stocks when a guardian signs the NIN application form.
What Are The Most Traded Stock Exchanges in UAE?
The UAE has 3 main stock exchanges:
- The Dubai Financial Market (DFM)
- The Abu Dhabi Securities Exchange (ADX)
- The NASDAQ Dubai
The below section breaks down the 3 main stock exchanges in UAE, starting with the biggest – Dubai Financial Market.
1. Dubai Financial Market (DFM)
The DFM is founded in 2000 and more than 170 Sharia-compliant companies are listed on it. Companies that are ‘haram’ aren’t listed on the DFM and the Securities and Commodities Authority (SCA) regulates it. Examples of companies listed at the DFM are:
- Air Arabia
- Emaar Properties
- Oman Insurance Company
- Dubai Investments
- SHUAA Capital
- Emirates NBD
- Mashreq Bank
- Gulf Finance House
- Dubai Islamic Bank
- Commercial Bank of Dubai
- Ahjman Bank
2. Abu Dhabi Securities Exchange (ADX)
The ADX is founded in 2000, based in Ras Al Khaimah, Al Ain, Fujairah, and Sharjah, and UAE companies are traded with them. Examples of companies listed at the ADX are:
- Finance House
- Union National Bank
- Gulf Pharmaceutical Industries
- Qatar Telecommunications
- Noor Takaful
3. NASDAQ Dubai
The NASDAQ Dubai is founded in 2005, located in the Dubai International Financial Center (DFIC), and lists local and international companies. Companies like the Bank of London and the Middle East and Real Estate Investment Trust are listed on the NASDAQ Dubai.
The most common way to buy stocks in UAE is through a regulated online stockbroker like eToro. They offer simple account set up, zero commission stock trading and advanced copy trading features.
You can also invest in the UAE stock market directly from the company or by using a full service stock broker.
- 1 How Does the UAE Stock Market Work?
- 2 How To Invest In The UAE Stock Market – 5 Quick Steps
- 2.1 Step 1: Get Your Own Investor Number (NIN)
- 2.2 Step 2: Selecting an Online Stockbroker
- 2.3 Step 3: Pick a Stock to Invest In
- 2.4 Step 4: Open a Trade
- 2.5 Step 5: Optimizing Your Portfolio
- 2.6 What Are The Most Traded Stock Exchanges in UAE?
- 3 Conclusion