Unlocking securities-backed financing in a booming UAE investment landscape

Amidst the sands of economic growth in 2024, characterized by surging rates and tightened liquidity, the United Arab Emirates (UAE) stands as an oasis for foreign direct investment (FDI). Within this dynamic landscape, the UAE’s economic growth remains buoyant, with significant inflows driving its economy, marked by a substantial 10% year-on-year increase in FDI. The World Investment Report 2023 by the United Nations Conference on Trade and Development (UNCTAD) underscores this remarkable growth, revealing that FDI in the UAE reached an impressive $22.737 billion in 2022.[1]

As investors and businesses navigate this economic terrain, private financing emerges as a strategic avenue for those seeking stability and the potential to capitalize on the thriving and dynamic UAE market, which has risen as the 16th top recipient of FDI worldwide.[2]

Accelerating IPO listings and global connectivity

The Dubai International Financial Centre (DIFC) has been instrumental in promoting future IPO listings and stimulating the country’s equity market. With the government’s commitment to expanding the size of its financial market, Dubai has solidified its status as the country’s financial services hub. The shift has concurrently unlocked opportunities for the Gulf Cooperation Council’s (GCC) asset management industry, intensifying its competitiveness in offshore investing through increased sophistication in product offerings and supportive regulatory initiatives.[3]

Hamed Ali, Chief Executive Officer of the Dubai Financial Market (DFM), has expressed strong interest in actively pursuing avenues for cross-border collaborations with stock exchanges in China, Hong Kong, and the broader Asia-Pacific region.[4]

Such initiatives enhance the UAE’s global connectivity and provide investors with increased opportunities for diversification and growth. In the face of geopolitical tensions in the Middle East, Dubai’s IPO market outlook remains resilient and positive, offering a contrasting environment compared to markets in the US and Europe, according to PwC.[5]

Driving economic diversification with securities-backed financing

The UAE offers diverse opportunities for individual investors and financial advisors alike with its government’s strategic sectoral focuses. Key sectors such as technology, logistics, and financial services[6] shine with a positive outlook for investors, while asset managers actively explore ways to help clients achieve enhanced financial returns. Amidst this backdrop, capital solutions tied to securities gain prominence, enabling investors to tap into these expanding sectors and align their investment strategies with the UAE’s economic diversification goals while effectively mitigating risk.

Among the series of initiatives implemented to reduce its dependence on oil and drive economic diversification, the UAE launched the world’s first dedicated center for family wealth in March 2023 to support family businesses with digitalization, cultural issues, governance, and succession planning.[7] The appeal of the UAE extends beyond wealth managers, attracting ultra-high-net-worth individuals (UHNWIs) who are drawn to the supportive business environment, low tax rates, and geographical advantage. These UHNWIs view the UAE as an ideal destination to grow their wealth and diversify their investment portfolios.[8]

The substantial influx of capital into the UAE is also fueling the growth of the region’s real estate sector, with luxury property sales valued at $25 million and above doubling in 2023, according to property consultant Knight Frank LLP.[9] This flourishing market presents wealth managers with opportunities to explore creative ways for value creation, such as securities-backed financing, where the potential of underlying assets will be utilized. Meanwhile, investors can also capitalize on the region’s real estate sector.

EquitiesFirst’s strategic expansion in a flourishing region

In 2024, EquitiesFirst, a pioneer in alternative financing solutions, is set to make a significant mark by establishing its presence in the heart of Dubai. This move comes against the backdrop of the UAE’s robust investment landscape and steadfast economic development. As the region presents itself as a reliable market on a long-term trajectory,[10] EquitiesFirst’s strategic move aligns seamlessly with the burgeoning opportunities enabled by its expanding financial market and ambitious plans to bolster its global economic standing.

In an era of market uncertainties, adopting an innovative mindset is essential to identify prospective areas for strong value creation. EquitiesFirst’s financing model aligns the long-term interests of its partners and the firm. As a capital provider that offers competitive and transformative liquidity, investors and businesses are empowered to tap into the underlying potential of their assets through EquitiesFirst’s securities-backed financing while navigating the dynamic and resilient UAE market. The expansion underscores EquitiesFirst’s commitment to empowering clients to seize growth opportunities, diversify portfolios, and thrive in a market through economic dynamism and forward-looking financial initiatives.

[1] https://u.ae/en/information-and-services/finance-and-investment/foreign-direct-investment

[2] https://u.ae/en/information-and-services/finance-and-investment/foreign-direct-investment

[3] https://www.strategyand.pwc.com/m1/en/strategic-foresight/sector-strategies/financial-sector-consulting/opportunities-in-asset-management.html

[4] https://www.scmp.com/business/banking-finance/article/3241217/dubai-explores-collaborations-stock-exchanges-including-those-hong-kong-and-asia-eye-future-dual

[5] https://www.pwccn.com/en/audit-assurance/publication/global-ipo-watch-aug2023.pdf

[6] https://www.dubai.com/blog/uae-economy-period-remarkable-growth-and-diversification/#:~:text=finance%2C%20and%20technology.-,Diversification%20Efforts,more%20balanced%20and%20resilient%20economy

[7] https://www.mediaoffice.ae/en/news/2023/March/01-03/difc-famwealth

[8] https://jingdaily.com/posts/chinese-wealth-shifts-to-dubai-as-business-opportunities-boom

[9] https://www.bloomberg.com/news/articles/2024-01-15/dubai-sales-of-25-million-homes-double-as-global-elite-move-in

[10] https://www.dubai.com/blog/uae-economy-period-remarkable-growth-and-diversification/#:~:text=finance%2C%20and%20technology.-,Diversification%20Efforts,more%20balanced%20and%20resilient%20economy


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