By Achraf Drid, Managing Director at XTB MENA
The Middle East and North Africa are no longer just an energy story. Amid the plethora of industries seeing growth, the MENA region’s capital markets are fast becoming a strategic segment in their own right. Daily trading volumes linked to the area are compounding. In the Middle East in particular, volumes are also fuelled by a surge in hedge funds and asset managers relocating to Dubai and Abu Dhabi.
This is not a passing trend. It is a structural emergence of the region as a global capital hub.
For investors in the MENA region, the opportunity set looks very different from even a few years ago. Local equity and sukuk markets are trading with greater depth, foreign ownership limits are being revisited, and listed derivatives are easier to access. Across our client base, we see growing demand for a wider range of assets and cross-border exposure, indicating a shift towards more intentional portfolio construction as well as educated and professionalized trading.
To support traders in growing toward long-term wealth, the industry should focus on risk and execution. Start with risk culture. Ideas like position sizing, margin discipline and thinking through different risk scenarios should be part of how first-time investors talk about their portfolios and could be nurtured through strong education and practice. Then there is price integrity: straightforward execution, transparent fees, and best-execution standards make it possible to put a sound trading strategy in place.
From my vantage point, the MENA region is uniquely placed to build a more resilient model for retail and professional participation in global markets. In the next cycle, the firms that focus on education and their traders’ success could build a strong position in the market. For investors, support in their journey is invaluable.