UAE Equity Markets Gain Momentum as Saudi Arabia Faces Valuation Concerns

The UAE is seeing renewed momentum in equity capital markets, with several planned deals including a residential real estate investment trust and listings from ALEC Engineering & Contracting LLC, Arabian Construction Co., and Dubizzle Ltd. Meanwhile, Saudi Arabia faces investor caution over valuations following disappointing debuts from Flynas Co. and Specialized Medical Co. Despite this, the kingdom's deal pipeline is growing with Alandalus Educational Co. planning an IPO.

The United Arab Emirates (UAE) and Saudi Arabia are both experiencing significant developments in their equity capital markets, albeit with different trajectories. While the UAE is witnessing renewed momentum in equity capital markets, Saudi Arabia faces investor caution over valuations.

In the UAE, equity capital markets are showing renewed vigor, driven by a series of planned deals. The residential real estate investment trust (REIT) that debuted in May has helped revive sentiment, and several other real estate-linked offerings are in the pipeline. Dubai’s ALEC Engineering & Contracting LLC is holding investor meetings ahead of a potential listing, while Arabian Construction Co. and Dubizzle Ltd. are also preparing for listings. Dubai Holding, the conglomerate owned by the emirate’s ruler, plans to list a portfolio of malls and other commercial assets [1].

The UAE’s performance can be attributed to its economic diversification and resilience, with the Abu Dhabi wealth fund Mubadala Investment Co. preparing to offload part of its stake in telecom operator Du through a follow-on offering. Secondary offerings in the UAE have outpaced initial public offerings (IPOs) in the first half of 2025, with large placements in ADNOC Gas Plc and First Abu Dhabi Bank PJSC [1].

In contrast, Saudi Arabia is facing investor caution over valuations. Disappointing debuts from Flynas Co. and Specialized Medical Co. have dampened enthusiasm, particularly amidst weaker oil prices and greater scrutiny of pricing. However, the kingdom’s deal pipeline is growing, with Alandalus Educational Co. planning an IPO and several other firms exploring listings in sectors such as infrastructure, tourism, and industrial projects [1].

The UAE's economic resilience and diversification efforts are paying off, making it an attractive market for investors. Meanwhile, Saudi Arabia's continued diversification efforts and ample fiscal headroom present a compelling structural growth story. A correction in valuations could bring back more foreign investors, especially since Saudi Arabia still trades at a premium compared to other emerging markets [1].

Investor interest across the region has also been supported by rising Gulf representation in emerging market indexes. Some of the region’s smaller markets, such as Kuwait and Qatar, are also preparing listings, further bolstering the equity capital markets landscape [1, 2].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-15/uae-share-sales-regain-momentum-while-saudi-faces-valuation-test
[2] https://crypto.news/blocksquare-surpasses-200m-in-tokenized-real-estate-amid-rwa-surge/