The FTSE ADX General Index is the main benchmark for equities listed on the Abu Dhabi Securities Exchange (ADX), tracking the performance of the most actively traded companies. It is a market-capitalisation-weighted index.
As the primary index representing the UAE’s capital market, the FTSE ADX General Index reflects the economic strength and key industries of Abu Dhabi, including energy, financials, and telecommunications. With the country continuing to diversify its economy, the index serves as a key gauge for both local and international investors looking to gain exposure to the region’s economic growth.
FTSE ADX General, Chart & Dividend Yield
The FTSE ADX General Index, formerly known as the ADX General Index, was rebranded in 2022 when the Abu Dhabi Securities Exchange partnered with FTSE Russell to enhance the transparency and accessibility of the index. The index includes over 70 companies, covering sectors such as technology, healthcare, financials, and telecommunications.
The index has struggled for any real upside momentum over the past few years following the surge between 2020 and 2022. As of late 2024, the index had declined 3.9% over the past 12 months, with a 1.5% slide for the year-to-date.
FTSE ADX General Price Forecast
Bull Argument: The FTSE ADX General Index is well-positioned to benefit from Abu Dhabi’s economic diversification strategy, which aims to reduce reliance on oil and foster growth in sectors such as technology, infrastructure, and renewable energy. Abu Dhabi is positioning itself as a global financial hub. Combined with its fiscal stability, the region is attracting foreign investors. Additionally, strong corporate governance standards and government-backed companies offer a degree of security.
Bear Argument: On the other hand, any market will have risks that need to be taken into consideration. One of the risks is its dependence on energy markets. Volatility in oil prices and global demand for hydrocarbons can heavily influence the economy, and FTSE ADX’s performance. Furthermore, geopolitical tensions in the region and global economic slowdowns may impact investor sentiment, posing risks to the index’s growth trajectory.
Who Should Buy the FTSE ADX General?
Investing in a fund tracking the FTSE ADX General Index offers exposure to companies listed on the Abu Dhabi Securities Exchange. Before committing, investors should evaluate whether the index’s characteristics align with their financial goals and risk tolerance:
Seeking Exposure to the UAE’s Growth Story: The FTSE ADX General Index provides exposure to the UAE’s economic development, particularly in the financial, telecommunications, and energy sectors. Investors looking to capitalise on the Middle East’s rapid development might find this index appealing.
Positive on the Energy Sector: Given the region it is located in, it is natural that the index is heavily weighted toward companies like Abu Dhabi National Energy and ADNOC Gas, which are players in the energy market. Investors who remain optimistic about the future of oil, gas, and energy-related industries may see opportunities for growth.
Banking Sector Stability: First Abu Dhabi Bank, Abu Dhabi Commercial Bank, and other major financial institutions offer relatively stable investment opportunities. These banks are well-capitalised and play a crucial role in Abu Dhabi’s economy, making them attractive for those seeking financial sector exposure.
Confidence in Abu Dhabi’s Diversification Efforts: The government of Abu Dhabi has been focusing on expanding its non-oil sectors, such as real estate and telecommunications. Companies like Aldar Properties may be able to benefit further from these diversification efforts, making the index attractive to those confident in the UAE’s long-term vision.
Prepared for Oil Price Volatility: Due to its exposure to the energy sector, the FTSE ADX General Index may experience volatility based on global oil prices and demand. Investors should be prepared for fluctuations.
FTSE ADX General Top 10 Companies
The FTSE ADX General is reviewed semi-annually in March and September. Major companies in the index include:
| Company | Market Cap (As of September 22, 2024) |
|---|---|
| International Holdings Company | $243.08 Billion |
| First Abu Dhabi Bank | $40.84 Billion |
| Emirates Telecommunications Group | $44.09 Billion |
| Abu Dhabi Islamic Bank | $12.93 Billion |
| Al Dar Properties | $17.34 Billion |
| Abu Dhabi Commercial Bank | $17.29 Billion |
| Alpha Dhabi Holding | $32.78 Billion |
| Abu Dhabi National Energy | $87.55 Billion |
| ADNOC Drilling | $20.38 Billion |
| ADNOC Gas | $65.61 Billion |
