The remarkable surge in Dubai's popularity has significantly boosted the emirate's stock market, according to recent data. The Dubai Financial Market's (DFM) General Index has seen impressive gains of 10.9 percent, making it the top performer in the Gulf Cooperation Council (GCC) region during the first nine months of 2024. Leading these gains are Salik and Parkin, two government-owned entities listed on the DFM.

Data indicates that since its listing in March, Parkin has risen by nearly 60 percent, while Salik has surged by almost 85 percent this year. Salik stands out as the top-performing stock in the DFM index for 2024. Analysts attribute this IPO wave in the UAE to the substantial increase in Dubai's resident population, which has grown by nearly 260,000 since January 2023. This growth is equivalent to almost 75 percent of the total population increase from 2018 to 2022.

Vijay Valecha, Chief Investment Officer at Century Financial, notes, "The extraordinary population growth over the past two years is positively influencing local stock market sentiment. The most evident synergies are seen in government-owned auto and utilities stocks like Parkin and Salik." Earnings reports for Q3 show Salik outperforming consensus estimates, with strong revenue growth from utility operators. For 2025, Salik forecasts a 25-26 percent year-over-year revenue increase, aligning with market expectations. The number of vehicles registered with Salik continues to grow at nearly 10 percent, with an Ebitda margin of 68 percent.

Similarly, Parkin's Q3 reports reveal a 25 percent year-over-year revenue growth and a remarkable 40 percent increase in Ebitda. The rise in Dubai's car population is reflected in Parkin's operational numbers, including public parking revenues and growth from developer parking. The latter saw a 42 percent increase due to partnerships with new developers and the phased introduction of parking spaces in privately developed areas.

Recently, Dubai's RTA approved a Dh3.7 billion, five-year plan for internal road infrastructure development, aiming to build 634km of new roads across 12 districts from 2025 to 2029. This plan, in line with Dubai's Master Urban Plan Strategy, targets areas with urbanization rates ranging from 30 to 80 percent and will be implemented in stages. This initiative corresponds to nearly 50 percent of the 2025 government budget allocated for various infrastructure projects.

Valecha adds, "These developments are highly favorable for Salik, as the expanded road network could lead to the addition of new toll gates. This aligns with the rise in residential projects in new areas like Dubai South and Jumeirah. The current trend of families moving from rentals to owning homes in new Dubai locations is likely to increase the number of cars on the road." For Salik, the 2024 guidance remains robust, with 2025 revenue growth projected at 25-26 percent. The addition of two new toll gates is expected to contribute nearly 5 percent to normalized annual growth. Revenue generation trips are anticipated to grow by 24-25 percent, with Ebitda margins staying between 67 and 69 percent.

Parkin's latest earnings report suggests it will meet its FY24 guidance. While no official forecast for next year has been provided, market estimates predict a 7-8 percent constant growth rate in net operating profit after tax. Total annual revenue growth is expected to be between 10 and 15 percent.

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