The United Arab Emirates' stock markets in Dubai and Abu Dhabi have lost approximately $120 billion in value since the start of the US-Israel war on Iran, placing them among the hardest-hit financial markets worldwide. Since the conflict began on February 28, Dubai's benchmark index has plunged about 16%, while Abu Dhabi's has dropped around 9%.
The Dubai Financial Market (DFM) General Index has shed about $45 billion in market capitalization, while the larger ADX General Index has lost roughly $75 billion. Financial markets in Qatar and Bahrain have declined about 4% and 7% respectively, while exchanges in Saudi Arabia and Oman have posted gains. On Wall Street, the benchmark S&P 500 has fallen approximately 7% over the same period amid mixed messages from US President Donald Trump regarding the war's expected duration and objectives.
The conflict has dealt a significant blow to the UAE's standing as a regional travel hub. Tens of thousands of flights have been canceled due to the war, many involving routes through Dubai International Airport, the world's busiest for international passengers. Tourism and travel contributed about $70 billion to the UAE economy last year, accounting for 13% of gross domestic product (GDP).
Haytham Aoun, an assistant professor of finance at the American University in Dubai, stated that while the market slide would be an unwelcome development for UAE authorities seeking to enhance the country's status as a financial hub, it should be viewed as a "temporary shock" rather than evidence of structural economic damage. He emphasized that this represents a short-term setback to investor sentiment and market confidence, but not necessarily a fundamental challenge to the UAE's long-term economic strategy.
Although the UAE's stock markets are relatively small by global standards, the country has invested heavily in financial services as part of its economic diversification efforts and now ranks among the top capital markets in the Middle East. The value of UAE-listed stocks surpassed $1 trillion for the first time in 2024, second only to Saudi Arabia's $2.5 trillion market in the region. Dubai rose to seventh place for competitiveness in the latest Global Financial Centres Index, its highest-ever ranking.
Source: www.aljazeera.com