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Abu Dhabi’s quarterly average Financial Market Index rose by 17% in Q1
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Dubai’s quarterly average Financial Market Index showed a growth of 9.2%
The foreign assets held by the Central Bank of the United Arab Emirates (CBUAE) increased to AED392.4 billion ($106 bn) by the end of the first quarter of 2021 (Q1’21), a quarter on quarter growth of 1.1 percent, a CBUAE report shows.
The apex bank ascribed the growth mainly to AED85.9 billion quarterly increases in foreign securities and other foreign assets by 25.7 percent (AED 9.2 billion), overshadowing a reduction in current account balances and deposits with banks abroad by 26.1 percent (AED90.7 billion). From March 2020 to March 2021, Central Bank Foreign Assets increased by 0.4 percent, YoY, added the report.
With regards to the country’s twin bourses, the report said Abu Dhabi’s quarterly average Financial Market Index rose by 17 percent during the first quarter of 2021. The quarterly average Market Capitalisation of companies listed at the Abu Dhabi Securities Exchange (ADX) surged by AED101 billion reaching AED826.7 billion at the end of the first quarter of 2021. The Quarterly Traded Value also rose by 74.7 percent during the first quarter of 2021 reaching AED50.3 billion. However, on an annual basis, the Abu Dhabi Financial Market Index fell by 3.3 percent.
Dubai’s quarterly average Financial Market Index showed a growth of 9.2 percent during the first quarter of 2021. The quarterly average Market Capitalisation of companies listed on the Dubai Financial Market (DFM) increased by AED25.2 billion reaching AED 353.9 billion by the end of the first quarter of 2021. Quarterly Traded Value rose by 4.8 percent during the first quarter of 2021 reaching AED 15.4 billion. On an annual basis, the Dubai Financial Market Index decreased by 14.1 percent.
In the meantime, Money Supply M1, which comprises Currency in Circulation outside Banks (Currency Issued – Cash at banks) plus Monetary Deposits, increased by 7.1 percent QoQ during the first quarter of 2021. On an annual basis, there was a 18.4 percent YoY climb in the monetary aggregate M1, reaching AED642.3 billion at the end of March 2021.
Money Supply M2 (M1 plus Quasi Monetary Deposits (Resident Time and Savings Deposits in Dirham, plus Resident Deposits in Foreign Currencies)), also increased by 0.6 percent QoQ during the first quarter of 2021.
On an annual basis, there was a 2.2 percent YoY increase in Money Supply M2, reaching AED1,487.5 billion at the end of the first quarter of 2021. Money Supply M3 (M2 plus government deposits at banks and at the Central Bank) fell by 0.2 percent QoQ during the first quarter of 2021.
On an annual basis, there was a 3.1% YoY growth in Money Supply M3, reaching AED1,766.4 billion at the end of March 2021.
Typically, the money supply M2 is considered the best indicator for the availability of liquidity in the economy, as it comprises currency in circulation outside banks, in addition to various deposits of all the resident sectors in dirham denomination, except for the deposits of the government sector in the UAE.
Statistical data show that at the end of the first quarter of 2021, there was a QoQ increase in M2. The rise in M2 during the first quarter of 2021 was mainly due to a 0.6 percent quarterly increase in the non-government resident deposits standing at AED1,391.6 bn by the end of March 2021.