By: Mahmoud Gamal
Dubai – Mubasher: Analysts expressed different opinions on the performance of the UAE stock markets on Wednesday following US president Donald Trump’s recent comments on diplomatic relations with Iran.
On Tuesday, Trump said the US is ready to make a "real deal" with Iran two days after he threatened the Persian Gulf country.
In May, Trump decided to walk away from the Iran nuclear deal, stressing he would reinstate the US economic sanctions imposed on Iran before the deal was signed in 2015.
Anticipation
Trump’s comments on relations with Iran, the Organization of Petroleum Exporting Countries’ (OPEC) third-largest producer, and warning after the withdrawal from the nuclear agreement, in addition to his attack on trade, particularly with the European Union (EU), are impacting the UAE’s twin bourses, senior financial analyst at Menacorp Financial Services Issam Kassabieh said.
The US president’s recent statements have impacted Tuesday’s trading session, reflected in the market’s thin liquidity, Kassabieh highlighted.
Investors are anticipating the local markets to settle in order to trade on blue-chip stocks with robust interim financial results, he indicated.
He added that high liquidity has been kept within the market after incurring losses, pointing out that waiting for the local markets to settle and keeping liquidity is the only option for most investors in the meantime.
Financial results
For her part, Marie Salem, director of Capital Markets at FFA Private Bank Dubai, said that the UAE markets are still captive to thin liquidity due to several factors, including the summer season that witnesses lower trading in general, in addition to firms’ exposure to the Abraaj Group crisis.
Investors’ confidence in the stock markets was shaken that some listed-companies with above-expectations results stood still in terms of trading volume, Salem noted.
She hoped liquidity in markets to boost and trading activities to recover by the end of summer.
Translated by: Mai Ezz El-Din
