Dubai stock market enters bear territory as US-Iran conflict escalates
What's the story
Dubai's stock market moved into bear-market territory, with the Dubai Financial Market General Index plunging by as much as 3.2% on Monday. The index is now down 21% from its February peak, marking a major downturn for the emirate's financial landscape. The decline comes amid escalating tensions in the Middle East and their impact on key industries such as energy, shipping, real estate, and tourism.
Market response
Conflict's impact on Dubai's economy
The recent market downturn can be traced back to the US-Israel strikes on Iran, which have triggered retaliatory attacks on Gulf cities with US military assets. This has led to travel disruptions and heightened shipping threats in the region, further fueling oil price hikes. As the conflict enters its third week, Dubai's reputation as a safe haven in an often volatile region is now under threat.
Stock performance
Property sector giants suffer major losses
Since the conflict began in late February, Emaar Properties PJSC and Emaar Development PJSC have suffered major losses of 34% and 35%, respectively. Before the outbreak of hostilities, Dubai stocks had witnessed a whopping 300% rally over nearly six years, driven by rising consumption, tourism, a property boom, and financial services. Junaid Ansari from Kamco Investment Co. said this decline was expected given the geopolitical situation in the region but also hinted at potential investment opportunities once stability returns.
Aviation impact
Flight operations at risk due to ongoing conflict
The ongoing conflict has also affected operations at Dubai International Airport. Emirates Airlines resumed limited services on Monday after a drone incident led to flight suspensions earlier in the day. Two drones also crashed near the airport last Wednesday, injuring four people. These incidents, along with missile and drone interceptions across Dubai, have caused regular delays and extended flight times as planes circle outside Dubai International Airport daily.