The UAE offers a variety of investment opportunities for those looking to get involved in the stock market. However, the process of purchasing shares can be confusing for first-time investors. This article will outline the steps you need to take to buy shares in the UAE. We will also provide tips on choosing the right company and making informed investment decisions.
What is a share, and what does it represent in a company or organisation?
A share is a unit of ownership in a company or corporation. When you purchase shares, you buy a stake in the company and become a shareholder. As a shareholder, you have certain rights, including voting on company decisions and receiving dividends (if the company pays them).
The shares of a company are listed on a stock exchange, and the price of each share is determined by supply and demand. The number of shares a company has issued is called its “capitalisation.” Publicly traded companies have a set number of shares they can sell, called their “float.”
How to research which shares would be the best investment for you in the UAE
The first step in purchasing shares is researching which companies you want to invest in. There are a few things you should take into consideration when making your decision:
The company’s financial stability: You can research a company’s financial stability by looking at its annual report and balance sheet.
The company’s share price: The share price will fluctuate based on supply and demand. You can check the current share price of a company on a stock exchange website.
The company’s history: It is essential to look at its history to get an idea of its track record. The company’s website or annual report can find this information.
Once you’ve decided which company you would like to invest in, you need to determine how many shares you would like to purchase. It will depend on your investment budget and goals.
What are the benefits of purchasing shares in the UAE?
There are many benefits to purchasing shares in the UAE. Some of these benefits include:
The ability to make a profit: When you purchase shares, you become a partial owner of the company. If the company makes a profit, you will receive a portion of that profit in the form of dividends. You can also sell your shares for more than you paid if the share price goes up.
The ability to participate in company decisions: As a shareholder, you have the right to vote on important company decisions. It includes decisions such as electing the board of directors and approving changes to the company’s articles of incorporation.
The ability to influence company policy: Shareholders can influence company policy by attending shareholder meetings and submitting resolutions.
The ability to receive dividends: Some companies choose to pay dividends to their shareholders. This portion of the company’s profit is distributed among shareholders.
How to purchase shares through a stockbroker in the UAE
To purchase shares, you must do so through a stockbroker. A stockbroker is a licensed professional who buys and sells shares on behalf of investors.
You can contact the Emirates Securities and Commodities Authority (ESCA) to find a stockbroker in the UAE. ESCA is the regulatory body for the UAE’s securities and commodities markets. You can also find stockbrokers listed on the Dubai Financial Market website. Saxo Bank Dubai is one such broker through which you can purchase shares.
Once you have found a stockbroker, you must open an account with them. To open an account, you must provide personal information, including your name, address, and date of birth. You will also need to deposit money into your account, which will be used to purchase shares. Once your account is open, you can begin buying and selling shares.
The risks associated with investing in shares
There are risks associated with purchasing shares in the UAE. These risks include:
The risk of loss: When you purchase shares, there is always a risk that you will lose money. The share price can go down, and you could lose your entire investment.
The risk of market volatility: The stock market can be volatile so that that share prices can go up and down quickly. It can make it difficult to predict what will happen in the future.
The risk of political instability: Political instability in the UAE could lead to a decrease in the value of shares. Investors may become concerned about the country’s stability and decide to sell their shares.
Before purchasing shares, you should carefully consider all the risks involved. It would help if you also spoke to a financial advisor to get more information about investing in the UAE.
