Impact of Foreign Ownership Regulations on Stock Performance: Evidence from the UAE’s ADX and DFM Market

Abstract

This research investigates the impact of foreign ownership regulations on stock performance in the United Arab Emirates, focusing on companies listed on the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM). It looks at how foreign investments affect share prices and trading volumes after the UAE changed its policies in 2020 to allow up to 100% foreign ownership. Using data from 2015 to 2025, ten leading firms, five from each exchange, were selected based on market capitalization. Three regression models were developed to measure the influence of market price, trading volume, and actual foreign ownership on stock price behavior. Results show that foreign ownership positively and significantly affects stock prices in both exchanges, especially in the most comprehensive model (Model 3), where all variables are included. The analysis also shows that market price consistently has a strong effect, but trading volume has a mixed effect across the models. These results are in line with what has been found in other emerging markets around the world. They support the idea that allowing more foreign ownership can make markets perform more effectively, raise prices, and boost investor confidence. The study concludes with policy implications for regulators and provides guidance for attracting long term institutional investors to the UAE’s financial markets.

Date of Award	2025
Original language	American English
Supervisor	Albert Wijeweera (Supervisor)