Select stocks likely to gain as Dubai's population rises

With Dubai's population hitting 3.8 million, the city's population growth is being evidently and tangibly felt by residents. This is likely to create strong opportunities for investors in select stocks in the Dubai Financial Market, analysts say.

- Somshankar Bandyopadhyay

Of late, the number of cars on the road has increased, malls are more crowded, and traffic delays have become the talk of the town. Population growth in Dubai is expected to land around the figure of three per cent from 2023's 3.7 million, data suggests. The average population growth rate stands to be approximately 2.97 per cent since 2020.

In addition, in the first six months of 2024 alone, Dubai welcomed 9.31 million visitors. The city hosted visitors 2.45 times its resident population. In 2023, Dubai opened up to 17.15 million tourists. "The city offers a life of luxury and ease, no income taxation, a good geographic location at the crossroads of the world, backed by strong government support, excellent safety, growing corporate opportunities and a rising global influence or soft power. Due to these reasons, Dubai is expected to reach 5.8 million in population by 2040," says Vijay Valecha, chief investment officer, Century Financial.

For example, Salik could see cars passing through its gates. Parkin may fulfil the city's need for vertical parking infrastructure. More heads mean more homes and these homes would need water, electricity and connectivity. A win for utility stocks. And finally, the city's taxis would gear up to service the mix of residents and tourists. "It's important to note that Salik, Dewa, Du, and Parkin operate as monopolies. While Dubai Taxi is not a monopoly, it currently holds the majority of the market share," Valecha said.

The toll collector: Salik