Emaar stocks drop over 9% as DFM, ADX index feel impact of tariff pressure

Dubai: The two Emaar stocks have come under intense pressure as the Dubai Financial Market opened 5.77% down in the opening minutes of the week's trade. On ADX, the general index is 3.8% down.

That the UAE markets will open in the negative was more or less a given after what happened on the Saudi Tadawul on Sunday, when the general index fell nearly 7% and racking up the biggest losses since 2020 during the Covid phase.

On the Saudi Tadawul, the investor mood is continuing from where it left on Sunday - the general index has shed 2.68% so far to 10,775 after the first 15 minutes of trade.

The Emaar stocks - seen as bellwether for the wider UAE capital markets - had been under pressure late last week too, after President Trump unveiled the new set of tariffs on the rest of the world.

At the end of the first hour of trading, the DFM is 6.44% lower and ADX by 4.43%.

Emaar Properties and Emaar Development are down more than 8% in the first 15 minutes. The Dubai Islamic Bank share was another seeing a pull down, by 7.5%.

On ADX, ADNOC Gas, FAB and Multiply stocks are recording drops of between 9.3% to 7.2%.

The DFM and ADX had seen significant increases in new investors since April 2022, which is when the IPO boom gathered serious speed. Many of these investors were not exposed to the Covid-time stock market losses, either in the UAE or outside. Since 2022, UAE stock markets have been among the best performing at various times.

So, the current sell-off is the first major one for these legions of newcomers to UAE stocks.

What the UAE stocks are experiencing is in line with that key Asian markets are going through. "There was a certain lag as UAE stocks seemed to be holding the line last last week while Asian counterparts tanked," said an analyst. "This week, the mood of pessimism has enveloped all markets."

It will take any positive on the tariff front to smooth out the volatility that markets are facing. If that doesn't happen and the EU lists its own set of counter tariffs, that would be the next trigger for renewed shakedowns of global markets.

On ADX, banking stocks are feeling heavy sell-off pressure so far today.

Analysts say that for new the risk-off attitude among investors is not limited to any sector. "Even though there is every chance of some of the UAE blue-chips posting strong Q1-25 numbers, the investor mood for the moment is one of outright pessimism," said a trader.

It means that while the insurer Takaful Emarat's is down 10%, which is the limit down, Drake & Scull is hovering around the 9.8% drop.

"No sector is being spared," said a trader. "But I am seeing chatter about investors wanting to get into risk-off UAE stocks in the coming days.

"It may be too early to be thinking of doubling down into defensive stocks."

According to Iridium Advisors, foreign inflows into GCC equity markets remain strong. In February, there was a net inflow of $2.47 billion, a significant increase from January's $939 million. Year-on-year, foreign inflows more than doubled from $890 million in February 2024.

The Trump White House officials have been quoted as saying individual countries are negotiating for a quick resolution on the tariff row. And well before markets sink any deeper.

"While China may remain an outlier in near-term negotiations, signs of constructive trade talks with other key economies could help restore investor confidence," said Murthy Grandhi, Company Profiles Analyst at GlobalData.

"Historically, markets have shown a capacity to rebound strongly when geopolitical risks subside or when policy responses appear measured. As such, even modest diplomatic progress or tariff rollbacks could serve as catalysts for a broad-based recovery in global equities."