Sheikh Tahnoon's Holdings Drive UAE's Stock Exchanges Toward Trillion-Dollar Milestone
The United Arab Emirates' rulers are set to achieve something that they have long desired. Their stock exchanges will soon be home to companies valued at over $1 trillion. As of March 31, 2024, Sheikh Tahnoon bin Zayed Al Nahyan's companies and those he oversees had at least 65% of the benchmark FTSE ADX General Index, as per Bloomberg. Out of this, the biggest is his conglomerate International Holding Co., or IHC, which has investments in everything from Rihanna’s lingerie line to Elon Musk’s SpaceX, as per the publication.
IHC has climbed more than 400-fold since its inception in 2019. The company, which was first started as a fish farmer, is now valued at over $240 billion, way more than McDonald’s Corp or Disney. Co. IHC also makes money from trading on the very exchange where it’s listed.
Sheikh is also the chief of Abu Dhabi's ruling family, the Al Nahyan family, the world's wealthiest family. According to experts, the Abu Dhabi market's peculiar structure may be bad news for global investment managers who want to profit as its main index has almost tripled since April 2020, making it the world's top-performing major market.
"The interlinkages of assets and the concentration of control in Sheikh Tahnoon’s hands, despite being neither ruler nor crown prince, are unusual even by Gulf standards," says Steffen Hertog, an associate professor at the London School of Economics, who studies the region.
"They also raise questions about whether there’s an equal playing field with private competitors and how well minority shareholders’ interests are protected," he added.
According to IHC's CEO Syed Basar Shueb, "Everybody has access to the company. I don’t see why people complain that it is not open for foreigners," he said in an interview. "Foreign investors always go to those traditional brokers, those who cannot provide that service. I have to make sure that I feed business to my own company."
The sheikh has steadily expanded his influence in the market, leveraging his holdings and position to acquire companies like Zambia’s Mopani copper mine. Additionally, efforts to stimulate the domestic economy have been propelled forward. The UAE's wealth funds and business hubs have actively diversified away from reliance on oil, a feat made possible through the concerted efforts of the ruling family.
Besides the robust stock market, the UAE has bolstered its global significance through flashy records. Since the beginning of 2020, the total market value of companies listed in the UAE has soared, reaching an impressive $950 billion, sourced from both Abu Dhabi and Dubai.
Furthermore, various strategies have been employed to drive these changes and attract investors, including initiatives such as permitting foreigners to own 100% of businesses and successful initial public offerings like Dubai Electricity & Water Authority PJSC's, which raised $6.1 billion.
"Capital markets have played a crucial role in facilitating this influx of international investments into the local economy, supported by an ambitious privatization agenda," explains Rami Sidani, head of Middle East and North Africa at Schroders Investment Management.