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Monday, December 11, 2023

How to Buy Stocks in UAE – A Comprehensive and Detailed Guide

By Century Financial in 'Blog'

A New Year, A New Beginning: 7 Financial Resolutions for 2023

Investing in the UAE stock market offers local and expatriate investors a unique opportunity. Whether you're looking to diversify your portfolio or take your first steps into the world of stock trading, understanding the nuances of the UAE stock market is key. This guide provides a step-by-step approach to investing in the UAE, ensuring you can make informed decisions.

Understand the UAE Stock Market Landscape

Before diving into stock trading, it's important to understand the UAE stock market. The UAE displays several major stock exchanges, including the Dubai Financial Market (DFM), the Abu Dhabi Securities Exchange (ADX), and Nasdaq Dubai. Each exchange has its own set of rules, listed companies, and trading dynamics. Familiarising yourself with these markets can help you decide where to invest based on your financial goals and risk appetite.

Dubai Financial Market (DFM)

Launched in 2000, the Dubai Financial Market (DFM), overseen by the Securities and Commodities Authority, became a public company in 2006. Focused on Sharia-compliant firms, it lists over 170 securities, mainly from the UAE and nearby regions. Trading runs Sunday to Thursday, 10:00 AM - 1:50 PM.

Abu Dhabi Securities Exchange (ADX)

Established in 2000, the Abu Dhabi Securities Exchange (ADX) is governed by the Securities and Commodities Authority and focuses on UAE-based companies, listing 73 securities. It operates from Sunday to Thursday, 10 AM to 1:50 PM, mirroring DFM's trading pattern.

NASDAQ Dubai

With a broader international focus, NASDAQ Dubai lists stocks, bonds, and REITs from regions like North Africa, India, and Turkey. Governed by the Dubai Financial Services Authority, it's primarily owned (66%) by DFM and lists 146 securities. Trading occurs Sunday to Thursday, from 10 AM to 2 PM.

Obtain an Investor Number (NIN)

You need an Investor Number (NIN) to trade in the UAE stock market. This unique identifier is mandatory for all investors and can be obtained by submitting the necessary documentation to the relevant stock exchange, like the DFM. The process can often be completed online through services, simplifying your entry into the market.

Select a Broker

Choosing the right broker is crucial. You can go through local stockbrokers, major UAE banks, or online platforms. Choosing a broker that aligns with your investment strategy and provides the necessary support and tools is important. Due to the increased liquidity and the investment exposure offered in the international market, participants prefer to invest globally. Century Trader is one such platform which offers multiple products to trade in such markets.

Conduct Through Research

Investing in stocks requires a well-informed approach. Research the companies listed on the UAE exchanges, understanding their financial health, market position, and growth prospects. Analysing financial statements and keeping abreast of market news will help you identify stocks that align with your investment goals. If you plan to invest globally, Century Financial offers extensive research reports and insights that can help you form a strong foundation to pick equities with good returns.

Diversify Your Portfolio

Diversification is key to reducing risk. Don't put all your eggs in one basket; spread your investments across different sectors, companies, and asset classes. This approach helps mitigate risk and capitalise on the growth of various market segments. By spreading investments across various sectors, geographies, and asset classes, we aim to mitigate risk and harness growth from diverse market segments.

Understand and Managing Risks

Stock market investments come with inherent risks. Understanding these risks, such as market volatility and economic fluctuations. Adopt a disciplined investment strategy, and don't let emotions drive your trading decisions.

Monitor and Stay Informed

Regularly monitoring your portfolio is important. Stay updated on market trends and company performance. Be prepared to adjust your investments in response to market changes or shifts in your financial goals. Stay informed through continuous learning and by following market analysis and trends. Utilise resources like webinars, online courses, and financial news to sharpen your investing skills.

Conclusion

Investing in the UAE stock market can be a rewarding experience if done with careful planning and research. Understanding the market, selecting the right broker, diversifying your portfolio, and staying informed are key steps to successful investing.

This marketing and educational content has been created by Century Financial Consultancy LLC (“Century”) for general information only. It does not constitute investment, legal, tax, or other professional advice, nor does it constitute a recommendation, offer, or solicitation to buy or sell any financial instrument. The material does not take into account your investment objectives, financial situation, or particular needs.

The opinions expressed by the hosts, speakers, or guests are their own and may change without notice. Information is based on sources we consider to be reliable; however, Century does not guarantee its accuracy, completeness, or timeliness and accepts no liability for any loss arising from reliance on this content.

Trading and investing involve significant risk, and losses may exceed initial deposits. Past performance is not indicative of future results. CFDs and other leveraged products are complex instruments that may not be suitable for all investors. Please ensure you understand how these products work, the associated risks, and seek independent professional advice if necessary.

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Disclaimer: Trading in financial products carries substantial risk. Leveraged over-the-counter (OTC) derivatives, such as Contracts for Difference (CFDs) and spot forex, may result in losses exceeding initial deposits and may not be suitable for all investors. These complex instruments do not confer ownership of the underlying assets. Investors should carefully consider their investment objectives and risk appetite, and seek independent professional advice if necessary.

Century Financial Consultancy LLC (CFC) is licensed and regulated by the Capital Market Authority (CMA) of the UAE under license numbers 20200000028 and 301044 to carry out the activities of Financial Products dealer, Trading Broker in international markets, Trading Broker of OTC derivatives and currencies in the spot market, Introduction, Financial Consultations, and Promotion. CFC is incorporated under UAE law, registered with the Dubai Economic Department (No. 768189), with its office at 601, Level 6, Building No. 4, Emaar Square, Downtown Dubai, UAE, PO Box 65777.

The content on this website is provided solely for informational and educational purposes and does not constitute an offer, recommendation, or solicitation to buy or sell any securities or financial products.

Products and services offered by CFC are not intended for use in any jurisdiction where such use or distribution would breach local laws or regulatory requirements.

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