The United Arab Emirates stated that its two major markets will close for two days this week, steering clear of a potential collapse following repeated strikes on the Gulf nation as Iran responded to US-Israeli airstrikes.
The UAE Capital Market Authority announced via email that the Abu Dhabi Securities Exchange and Dubai Financial Market will close on March 2 and 3. It further stated, “The Authority will continue to monitor regional developments and continuously evaluate the situation, taking any required additional measures as needed.”
Since Saturday morning, Dubai and Abu Dhabi have endured hundreds of missile and drone attacks from Iran, which is retaliating against US and Israeli assaults. Most of these attacks have been intercepted, with few reports of casualties or damage in various areas of both cities. However, the attacks are causing panic among residents and present a significant threat to the UAE’s economy and its standing as a stable financial, logistics, and tourism center.
Bloomberg Intelligence analysts Edmond Christou and Salome Skhirtladze noted in a report, “US-Israel attacks on Iran threaten to cause demand shocks for UAE property sales, risking the absorption of 350,000 new units and 120 million visitors to Dubai Mall, as well as impacting tourism in retail and hospitality. UAE developers like Emaar and UAE banks with higher cyclical exposure are at risk.”
The market capitalization of UAE stock exchanges amounts to $1.1 trillion, ranking it as the 19th largest globally. It accounts for a 1.4% weight in MSCI Inc.’s emerging markets index.
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Market closures in the country are uncommon. Apart from regular holidays, UAE stock exchanges are usually closed only during periods of national mourning, like the passing of President Sheikh Khalifa bin Zayed Al Nahyan in May 2022.
Nonetheless, it is not unusual for countries to close their stock markets during times of uncertainty and unrest. For instance, Turkey suspended trading for a week following an earthquake in 2023, and the market… Russia halted its market for approximately a period in 2022 after invading Ukraine. In Greece, the Athens Stock Exchange closed for five weeks during the 2015 sovereign debt crisis and… when trading resumed.
In other parts of the Gulf, the Kuwait Capital Markets Authority announced that the country’s stock exchange will resume trading on March 2 after suspending operations on Sunday.