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As one of the UAE’s two major financial centres, Abu Dhabi has played a prominent role in the development of the nation’s Islamic financial services (IFS) sector. In January 2020 Islamic banks accounted for about 18% of total banking sector assets in the country, according to the Central Bank of the UAE. In the local capital markets, sovereign and corporate sukuk (Islamic bonds) issuances comprise the bulk of the Islamic offerings, while in the insurance sector takaful (Islamic insurance) companies operate as either standalone entities or as part of larger, conventional banks. Abu Dhabi’s local IFS market features an onshore component, populated by companies transacting directly with the domestic market, and an offshore component, operating within the jurisdiction of the Abu Dhabi Global Market (ADGM), the emirate’s financial free zone that opened in late October 2015. ADGM was home to more than 100 financial service companies as of early 2020.

Abu Dhabi’s capital markets started 2020 on a positive note, bolstered by solid gains on the exchange’s main index in 2019. Similarly, the local debt market ended 2019 favourably, with the UAE ranking as the biggest issuer of fixed-income instruments in the GCC that year. Although much remains to be seen as global markets deal with the twin ramifications of Covid-19 and lower oil prices in early 2020, an increasingly proactive stance to economic diversification and a policy of domestic rationalisation that is creating an added need for debt financing, and which coincides with suppressed rates in global credit markets, bodes well for Abu Dhabi’s capital markets in the medium to long term. Against this backdrop, an ongoing process of reform and the emergence of a new trading platform are set to add further dynamism to the financial markets. This chapter contains an interview with Khalifa Salem Al Mansouri, Chief Executive, Abu Dhabi Securities Exchange.

Despite the adverse effects of a low oil price environment over recent years, Abu Dhabi’s banking sector has remained well capitalised with a high degree of liquidity. Meanwhile, its financial performance has been characterised by rising net profits and lower cost-to-income ratios. A recent phase of consolidation has significantly altered the structure of the local market, with the larger balance sheets of financial institutions leaving them better positioned to make gains in an increasingly competitive domestic and international environment. Nevertheless, declining international oil prices and the effects of the global Covid-19 pandemic in early 2020 appear set to make for a challenging year for the emirate’s banking industry. This chapter contains an interview with Hareb Masood Al Darmaki, Chairman, Central Bank of the UAE.

Abu Dhabi has leveraged its hydrocarbons wealth to pursue a sovereign investment strategy that spans the globe, establishing itself as one of the largest overseas investors in the world. To strengthen the exchange of capital and ideas, the government has worked to create free zones to capture foreign direct investment, benefitting the emirate’s economic diversification strategy. Abu Dhabi’s status as a trading power, meanwhile, is supported by large export volumes of crude and refined oil bound for destinations as diverse as the Netherlands and Japan, and the emirate’s expansive logistics infrastructure has helped it become a primary intake point for imports to GCC countries. This chapter contains interviews with Tariq Bin Hendi, Director-General, Abu Dhabi Investment Office; and Mohamed Helal Almheiri, Director-General, Abu Dhabi Chamber of Commerce and Industry.

Lower oil prices and a rigorous process of fiscal reform have led to a challenging economic backdrop for Abu Dhabi’s residents and businesses in recent years. Although concerns that the Covid-19 pandemic of 2020 would lead to a global downturn in the year ahead loomed large as of mid-2020, a shift to a more expansionary fiscal stance has helped establish a more promising foundation for growth moving forwards. Moreover, while government funding remains central to economic expansion, a major overhaul of the investment framework at both the national and emirate level aims to harness the power of private capital in Abu Dhabi’s future development. This chapter contains interviews with Ahmed Ali Al Sayegh, UAE Minister of State, and Chairman, Abu Dhabi Global Market; and Mohammed Ali Al Shorafa Al Hammadi, Chairman, Abu Dhabi Department of Economic Development.