Dubai stocks slump the most since 2022 after UAE markets reopen

Stocks in Qatar, Riyadh and Kuwait started to recoup some losses on Wednesday, amid soaring oil prices due to supply concerns in the region as a result of the conflict.

• Dubai stocks fell 4.7%, sharpest drop since May 2022
• UAE markets reopened after closure due to Iran conflict
• Dubai's image as a safe haven is threatened by regional tensions

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Equities in the United Arab Emirates tumbled as trading resumed on Wednesday, following a two-day closure aimed at protecting the Gulf state’s key markets as the Iran war erupted.

The Dubai Financial Market General Index closed 4.7% lower, the sharpest drop since May 2022. Abu Dhabi’s FTSE ADX General Index fell 1.9%.

The UAE Capital Market Authority had temporarily closed the Dubai Financial Market and Abu Dhabi Securities Exchange on March 2 and March 3, as both emirates faced missile and drone attacks from Iran, which has been responding to an onslaught from the US and Israel that began Saturday.

Dubai’s exchange implemented a “temporary adjustment limit down threshold” of 5%, with many stocks falling by that amount on Wednesday. Emirates NBD Bank PJSC and Emaar Properties PJSC led declines by index points in today’s session.

Equities in Dubai, the Middle East’s financial hub, soared to a 2006 high earlier in February as investors bet on its resilient economy. Its main benchmark had notched a blistering 300% rally that started almost six years ago, powered by growing consumption, a property boom and expanding financial services.

Now, the Iran conflict threatens to upend the UAE’s carefully cultivated image as a haven of calm in an often volatile region.

Dubai is particularly vulnerable “because it is more reliant on trade, tourism, and expatriates, its property prices have almost doubled since the Covid trough in 2020, and its equity market is the only one among the larger GCC ones which has significant foreign ownership,” said Hasnain Malik, an emerging markets equity and geopolitics strategist at research firm Tellimer, referring to Gulf Cooperation Council markets.

Still, noting the near-term risk brought by regional conflict, Cantor Fitzgerald analyst Kato Mukuru said that the declines should “open up some interesting opportunities for those who believe in the long-term equity story.” The firm recommended buying shares of UAE banks, calling the stocks a “low-risk, high-return” investments.

Stocks in Qatar, Riyadh and Kuwait started to recoup some losses on Wednesday, amid soaring oil prices due to supply concerns in the region as a result of the conflict.