Limited trading activity raises questions
The weak liquidity in the UAE stock markets has contributed to reassessing stock values, as investors face difficulties in exiting low-trading stocks, leading to a lower bid price for these shares due to the additional risks associated with the difficulty of selling. While high-trading stocks offer greater flexibility and allow for quick execution of trades, low-liquidity stocks may see their valuations decline due to diminished investor interest, weak expected growth, or a lack of catalysts. During the first half of 2026, the total trading volume of 20 low-liquidity companies amounted to only approximately 10.91 million AED, with less-traded companies accounting for a tiny fraction of the overall market liquidity, which totaled 284.8 billion AED. This reflects limited activity and the risk of high exit costs, reducing the attractiveness of these stocks for investment.
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