Dubai: “Trade wars are good, and easy to win.” These are the infamous words of US President Donald Trump. But for financial markets, trade wars have neither been good nor easy to trade.
One thing they have been, however, is the centre of attention for global investors, and that is expected to remain the case this week, analysts said, as the long-winded tit-for-tat continues between the world’s two largest economies.
Tariq Qaqish, managing director of asset management at Menacorp, said that trade tensions and tariffs on imports will continue to be a focus, as will geopolitical tensions in the Gulf following the drone attack on Saudi oil facilities earlier this month.
“Locally, I don’t think there’s a real catalyst for buying right now. Earnings for the third quarter of the year will definitely have an effect on some company, but there shouldn’t be any surprises there,” he said.
“The most important thing for local markets to regain a little bit of volume is the M&A (merger and acquisition) deals that could happen in the future.”
Qaqish said there were speculations about further consolidation in the UAE, specifically in the banking and the insurance industries. This would follow a wave that started in 2016 as the National Bank of Abu Dhabi and First Gulf Bank announced they would merge to create First Abu Dhabi Bank.
Internationally, analysts said that the next few weeks will also be decisive in the UK as the Kingdom readies to leave the European Union at the end of October, with a trade deal between the two parties still not concluded.
Across the pond, tensions are still high after news emerged on Friday that the White House is considering limiting fund flows from US investors into China, and blocking Chinese companies from listing shares on US stock exchanges.
“If this (blocking the listing of Chinese shares in the US) is denied, expect a bounce in tech stocks,” said Charles-Henry Monchau, managing director for investment management at Al Mal Capital.