UAE stock markets slide after a two-day suspension following the Iran attack
The stock markets in Dubai and Abu Dhabi reopened on Wednesday after a two-day suspension following Iran's unprecedented?wave of?missiles and drone attacks against the Gulf nation.
Capital Markets Authority of the UAE closed ADX and DFM March 2 and 3 in order to prevent a meltdown. This was an unusual step, as it did not coincide with a holiday or mourning period.
The combined market cap of both exchanges is approximately $1.1 trillion.
Investors waited for clarity on the extent of the damage caused by the weekend strikes in both emirates, including the airports, the ports and the residential areas.
Dubai's main share index fell 4.7% intraday, its largest drop since May 20,22. The decline was a result of a broad range of factors, led by the blue-chip developer Emaar Properties, which dropped 4.9%. Budget airline?Air Arabia also declined 5%.
Top lender Emirates NBD dropped 5%.
The index in Abu Dhabi fell by 3.6%. This is the largest decline since May 20,22. First Abu Dhabi Bank, the biggest lender, lost 5%. Dana Gas, TAQA and other energy stocks were each down 5%.
Aldar Properties is down 5%.
ADNOC, which is the parent company for the fuel distribution, drilling and logistics chains, as well as the gas industry, was under pressure. The entire complex was sold at the same time.
Both exchanges announced that they will temporarily lower the price limit of securities to -5%.
The Abu Dhabi Securities Exchange (Ads) has instructed listed companies to assess their financial and operational exposure immediately and disclose any material information which could influence investor decision-making.
Ahmad Assiri is a research analyst at Pepperstone. He said that the closure sent a message to investors that regulators prioritize orderly price discovery above a?volatility rollercoaster.
As markets re-price the global and regional events of two days, traders should be prepared for a volatile phase in price discovery. Assiri said that volumes may be well above average as pent up orders are released.
Assiri stated that the UAE's reopening will follow a similar pattern to some degree, as the Saudi market is already recovering from the initial shock. The Saudi market recovered from a 5% drop on Sunday to post gains on Tuesday.
Saudi Arabia's benchmark index rose 0.6% on track to extend previous session gains. The petrochemical producer Saudi Basic Industries Corp led the way with a 3% increase, despite the fact that the company is expected to suffer a huge net loss by 2025.
This result was mainly due to?losses and impairments related to the divestment of assets in Europe, and the Americas.
Jabal 'Omar Development has advanced by more than 8% following a sharp rise in profit.
Qatar Gas Transport, a Qatari company, grew 1.8%, while the index in Qatar increased by 0.3%.
Industries Qatar, however, fell by 1.3% as the petrochemical manufacturer announced plans to suspend or cut certain products.
(source: Reuters)
