Dubai Stocks Plunge into Bear Market Amid Ongoing Iran Conflict
Dubai stocks have slid into bear-market territory as the crisis in the Middle East continues to cause chaos in the energy, shipping, real estate, and tourism industries.
The Dubai Financial Market General Index fell as much as 3.2% on Monday, marking a 21% decline from its February high. If the index closes at this level, it will officially be in a bear market, defined as a decline of 20% or more from a peak.
The recent selloff was triggered by the US-Israel strikes against Iran, which has retaliated with attacks on Gulf cities. Travel in the region has been severely disrupted, and threats to shipping have escalated, driving oil prices higher. As the war enters its third week, the conflict threatens Dubai’s carefully cultivated image as a safe haven in an often volatile region.
Emaar Properties PJSC and Emaar Development PJSC have been the hardest hit since the conflict began at the end of February, with their stocks falling 34% and 35%, respectively. Prior to the outbreak of hostilities, Dubai stocks had experienced a 300% rally over nearly six years, fueled by growing consumption, tourism, a property boom, and financial services.
“This was expected and it’s a broad-based decline as seen from all the sectoral indices, so it entirely reflects the geopolitical situation in the region,” noted Junaid Ansari, head of research and strategy at Kamco Investment Co. “There will be significant opportunities for bottom-fishing when things stabilize.”
Emirates, the national airline, resumed limited services at Dubai’s main international airport on Monday after a drone incident caused a temporary suspension of flights. Two drones also fell in the vicinity of the airport on Wednesday, resulting in injuries to four people.
All the attacks, along with missile and drone interceptions happening across Dubai, have led to frequent delays and extended flight times as aircraft circle the skies outside Dubai International Airport on a daily basis.
The ongoing conflict is not only affecting the stock market but also raising concerns about the broader economic impact on Dubai, which has long positioned itself as a hub for business and tourism in the Middle East.
