UAE Stock Exchanges Hit Record Highs Following First Exceptional Closure in Their History
UAE stock exchanges registered record levels once again following the first exceptional closure in their history, with Dubai rising to 5,708 points and aviation, banking, and real estate stocks climbing between 6% and 8%.
The UAE Securities and Commodities Authority announced the first exceptional two-day closure in the modern history of UAE stock exchanges, taken as a "precautionary step" amid escalating Iranian-American-Israeli tensions and accompanying concerns related to the Gulf region.
When markets reopened, a strong buying wave surged, driven by investor optimism regarding ceasefire talks; the Dubai Financial Market index rose to a record level at 5,576 points before reaching 5,708.78 points, while the Abu Dhabi Securities Exchange (ADX) index surpassed the 10,000-point threshold.
Air Arabia shares rose by 7%, while Abu Dhabi Islamic Bank (ADIB) and Abu Dhabi Commercial Bank (ADCB) shares increased by 6% each. Aldar Properties shares led the gains with an 8% rise, amid renewed confidence in the regional market.
The UAE dirham remains stable at $3.6725 due to its firm peg to the US dollar, providing a hedge against monetary uncertainty for foreign investors. However, analysts warn that the continuation of the UAE stock exchanges' gains is contingent on the ceasefire agreement holding, as any diplomatic breakdown could lead to a sharp correction ranging between 3% and 5%.
What do these terms mean?
DFM Index: The main index of the Dubai Financial Market, comprising the largest companies listed on the Dubai stock exchange and serving as the primary benchmark for the UAE economy's performance in financial markets.
Precautionary Trading Halt: A decision taken by the regulatory authority to temporarily suspend trading during times of crisis, preventing panic selling and protecting market stability.
Dirham-Dollar Peg: A fixed monetary policy adopted by the UAE for decades, maintaining a constant exchange rate of 3.6725 dirhams per dollar, thereby eliminating currency risks for international investors.
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