UAE stock market boom is real value, not meme

In fact, with the rise of “memes” and other well-known fads, the bigger the losses, the bigger the profits investors can make. Notably, as the IPO pipeline in Western markets dried up and the Middle East joined the fray, returning to a first-principles approach, investors are focusing on the fundamentals of companies that not only generate profits, but also pay dividends.

From healthcare to infrastructure to technology and now education, the deepening of capital markets in the UAE is triggering inflows from passive and active fund managers as these markets become too large and lucrative to ignore anymore. Notably, Dubai real estate transactions have mostly outpaced financial market volumes this year, suggesting upside potential for liquidity and market depth (which is the norm in Western financial markets).

It is clear that there is a frenzy in capital markets as hedge fund bankers flock to the UAE. The actions of Wall Street bankers, often seen as higher up the capitalist food chain, have further bolstered confidence as median domestic investors look to participate in the growth potential of these companies. More importantly, for the entire UAE.

However, mania is a dangerous word, and investors who have been burned in other investment manias like cryptocurrencies are skeptical. To be ambiguous between the two is to not understand the principles of investing. Not only do UAE-listed companies have a proven track record of profitability (this is how the IPO market worked before the “bubble mania” took over), but also provide a “moat” to protect their core competencies that are not easily replaceable.

Investors would do well to look back at history to understand the differences and options created by the company’s increased supply. Not only do investors have the ability to gauge different growth prospects, they also have the option to diversify their holdings through a growing number of mutual funds and/or ETFs. One thing they shouldn’t do is ignore a wealth of opportunities, not from a speculative standpoint, but from a long-term wealth creation standpoint.

For mid-range investors, Taaleem’s space is closer to home. The value proposition is attractive relative to a global listed education provider, with upside potential not only in a fundamentally growing business, but also as a hedge against inflation. When you sit down and look at it, investors who have long watched memes operate on a single underlying assumption that underpins their decisions.

These companies exist as pure possibilities, and the market is asked to imagine its most astonishing possibilities. In most cases, these journeys ended in tears. By contrast, UAE IPOs showcase a worldview of tangible growth and cash flow generation progress.

While the former may make exciting headlines, the latter is where steady wealth is generated.