The United Arab Emirates announced that its two main markets will remain closed two days a weekin order to avoid a possible crisis after the repeated attacks suffered by the Gulf country in retaliation by Iran for the air strikes by the United States and Israel.
Abu Dhabi Stock Exchange and Dubai Financial Market will remain closed on March 2 and 3, the UAE Capital Market Authority said in an emailed statement.. “The Authority will continue to monitor the evolution of the situation in the region and evaluate it on an ongoing basis, taking additional measures as necessary,” he added.
Dubai and Abu Dhabi have faced hundreds of missile and drone attacks from Iran, which has been responding to the US-Israeli offensive since Saturday morning. Most have been intercepted and there are few reports of casualties and damage in multiple areas of both cities. Howeverthe attacks are causing panic among residents and pose a huge threat to the UAE’s economy and its status as a stable financial, logistics and tourism hub.
“The US and Israeli attacks on Iran threaten to cause a drop in demand in the UAE real estate market, which puts at risk the absorption of 350,000 units of new supply, as well as 120 million visits to the Dubai Mall and tourism in the retail and hotel sector“Bloomberg Intelligence analysts Edmond Christou and Salome Skhirtladze wrote in a note. “UAE property developers such as Emaar are vulnerable, as are UAE banks with greater cyclical exposure.”
The market capitalization of the UAE stock markets amounts to US$1.1 trillion, making them the nineteenth largest in the world. They represent 1.4% of the Msci Inc. emerging markets benchmark index.
Market closures are unusual in the country. Aside from regularly scheduled holidays, UAE stock exchanges typically close only during periods of national mourning, such as that following the death of President Sheikh Khalifa bin Zayed Al Nahyan in May 2022.
However, it is not uncommon for countries to close their stock markets during times of uncertainty and turmoil. Among recent examples, Türkiye suspended trading for a week following an earthquake in 2023 and the market soared upon reopening. Russia halted its market for about a month in 2022 following its invasion of Ukraine. In Greece, the Athens Stock Exchange closed in 2015 for five weeks during the sovereign debt crisis and collapsed when trading resumed.
Elsewhere in the Gulf, the Kuwait Capital Markets Authority announced that the country’s stock market will resume trading on March 2, after suspending operations on Sunday.
