The United Arab Emirates said its two key markets will close for two days of the week, avoiding a possible meltdown after the Gulf country was repeatedly hit as Iran retaliated against US-Israeli airstrikes.
Abu Dhabi Securities Exchange and Dubai Financial Market will be closed on March 2 and March 3, the UAE Capital Market Authority said in an emailed statement. “The Authority will continue to monitor developments in the region and assess the situation on an ongoing basis, taking any further measures as necessary,” it added.
Dubai and Abu Dhabi have faced hundreds of missiles and drone attacks from Iran, which has been responding to an onslaught from the US and Israel, since Saturday morning. Most have been intercepted and there are few reports of casualties and damage to multiple areas across both cities. But the attacks are causing panic among residents and pose a huge threat to the UAE’s economy and status as a stable financial, logistics and tourism hub.
“US-Israel attacks on Iran threaten demand shocks for UAE property sales, risking absorption of 350,000 units in new supply, as well as 120 million footfalls into Dubai Mall and tourism into retail and hospitality,” Bloomberg Intelligence analysts Edmond Christou and Salome Skhirtladze wrote in a note. “UAE developers, such as Emaar, are vulnerable as are UAE banks with greater cyclical exposure.”
The UAE stock exchanges’ market capitalization stands at $1.1 trillion, making it the 19th largest in the world. It holds a 1.4% weight on MSCI Inc.’s emerging markets benchmark.
Read More: Dubai’s Worst Nightmare Unfolds as Iran Strikes Neighbors
The market closures are unusual in the country. Outside regularly-scheduled holidays, UAE bourses are typically shuttered only during periods of national mourning, such as one that followed the death of President Sheikh Khalifa bin Zayed Al Nahyan in May 2022.
Still, it’s not uncommon for countries to shut their stock markets during times of uncertainty and turmoil. Among recent examples, Turkey suspended trading for a week after an earthquake in 2023 and the market soared upon reopening. Russia halted its market for about a month in 2022 after its invasion of Ukraine. In Greece, the Athens Stock Exchange shut in 2015 for five weeks during the sovereign debt crisis and plunged when trading resumed.
Elsewhere in the Gulf, the Kuwait Capital Markets Authority said the country’s stock exchange will resume trading on March 2 after halting operations on Sunday.
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