UAE stock markets are navigating a volatile near-term landscape, with global disruptions and geopolitical headlines shaping sentiment even as selective opportunities emerge beneath the surface, analysts say.
According to Bank of America (BofA), the current environment continues to favour companies with resilient earnings and structural support, particularly within Abu Dhabi’s energy complex.
BofA’s top short-term preferences highlight Adnoc Logistics & Services, Adnoc Gas and Adnoc Drilling as the strongest names to emerge from the recent crisis. Elevated tanker rates are expected to remain supportive through the second half of 2026, positioning Adnoc L&S to capture higher shipping income. The bank estimates the company’s 2026 EBITDA to be around 17 per cent above consensus, with upside from inventory restocking, longer-haul voyages and a rebound in UAE activity.
Adnoc Gas is seen as another key beneficiary of a “higher-for-longer” oil price environment, underpinned by BofA’s Brent forecasts of $93 per barrel in 2026 and $78 in 2027. While near-term export disruptions may weigh on volumes, the bank believes the company’s dividend yield and long-term growth profile offer downside protection. Adnoc Drilling, meanwhile, is viewed as largely insulated from current disruptions, with roughly 90 per cent of earnings before interest, taxes, depreciation and amortisation (Ebitda) secured under long-term take-or-pay contracts and strong free cash flow supporting potential dividend upside next year.
Beyond energy, BofA maintains a positive stance on Dubai utilities Dewa and Empower, despite modest earnings cuts linked to softer GDP growth expectations. Regulated earnings, strong balance sheets and fixed dividend payments continue to underpin their defensive appeal, analysts Abhishek Kumar and Sashank Lanka wrote.
While analysts point to selective stock-level strength, market participants remain cautious at the index level. As Vijay Valecha, Chief Investment Officer at Century Financial, noted, “Equity markets in the UAE have become increasingly news-flow driven in the short term, with recent geopolitical developments highlighting how quickly sentiment can override fundamentals.” He added that while renewed US-Iran talks briefly lifted sentiment, “the sustainability of the renewed strength and a full-scale recovery would depend heavily on whether the ceasefire holds and geopolitical tensions ease.”
Dubai’s equity benchmark, the DFM General Index, slipped 2.23 per cent in the week ending April 24, after two weeks of gains. Valecha highlighted that although banking earnings were generally resilient, rising impairment allowances warrant attention. “When the support ends, banks will review which loans can be repaid… leading to loan downgrades,” he said, while also noting that recent results have “presented a very robust picture” compared to initial forecasts.
In Abu Dhabi, the ADX General Index declined 1.33 per cent but is approaching strong technical support levels, raising expectations of a near-term rebound.
Overall, analysts believe the short-term outlook for UAE markets remains cautiously constructive, supported by resilient corporate earnings and dividends, but highly sensitive to geopolitical developments and shifts in investor sentiment.
