War Shock Slams UAE - $120bn Wiped Off Dubai, Abu Dhabi Markets

The war has delivered a sharp financial shock to the United Arab Emirates, wiping around $120 billion off stock markets in Dubai and Abu Dhabi and testing the country’s ambitions as a regional financial hub.

Since February 28, Dubai’s benchmark index has fallen about 16%, while Abu Dhabi’s has dropped 9%. In market value terms, the Dubai Financial Market lost roughly $45 billion, while the larger Abu Dhabi Securities Exchange shed about $75 billion.

The decline places UAE markets among the hardest hit globally, exceeding losses in Qatar, down 4%, and Bahrain, down 7%, while Saudi Arabia and Oman posted gains. The S&P 500 has fallen about 7% over the same period.

The sell-off reflects a rapid deterioration in investor confidence tied to the conflict’s economic fallout. Rising energy prices and geopolitical uncertainty have driven volatility across global markets.

Haytham Aoun said the downturn is “a short-term setback to investor sentiment and market confidence,” rather than structural damage to the UAE’s economy.

Beyond markets, the UAE’s role as a global travel hub has been disrupted. Tens of thousands of flights have been canceled, many involving Dubai International Airport, the world’s busiest for international passengers.

Tourism contributed about $70 billion to the UAE economy last year, accounting for 13% of GDP, making the sector particularly exposed to prolonged instability.

While the UAE is less exposed than some Gulf peers to energy supply disruptions caused by the Strait of Hormuz crisis, broader market effects have still been significant.

The conflict has strained regional logistics and trade flows, amplifying financial market reactions despite relatively stable domestic energy production.

Despite the losses, analysts stress the UAE’s long-term positioning remains intact. The country’s listed market value surpassed $1 trillion in 2024, second only to Saudi Arabia’s $2.5 trillion in the region.

Dubai recently ranked 7th globally in financial competitiveness and aimed to become one of the top four global financial centers by 2033.