Potential Trade Negotiations Between US and China Boost UAE Stock Market Index
Stock markets in the UAE soared on Friday, buoyed by signs of potential trade talks between the US and China that eased trade tensions roiling global markets.
In a positive development, China affirmed that the US has consistently expressed its readiness to negotiate tariffs, with Beijing's door open for dialogue. This move could signal a potential easing of the ongoing trade war that has weighed heavily on financial markets.
Dubai's principal index closed 0.4% higher, rebounding from Thursday's loss, with hefty contributors from the real estate and industrial sectors. Notable gainers included top developer Emaar Properties, which surged 1.5%, and toll gate operator Salik Company, up 1.4%. The stock exchange operator Dubai Financial Market saw a significant 4.4% increase following a 42% jump in its first-quarter net profit to AED127 million.
Meanwhile, Abu Dhabi's benchmark index extended its winning streak to a fifth consecutive session as it rose 0.2%. Key contributors included IHC-owned conglomerate Alpha Dhabi Holding and Adnoc Drilling, with each registering a 2.5% increase. Adnoc Gas edged higher by 0.6% ahead of its Q1 earnings due later in the day. The Dubai index added 2.5% on a weekly basis, while Abu Dhabi recorded a weekly gain of 2%, which is its strongest since November 2023, according to LSEG data.
Interestingly, oil prices, a significant catalyst for the Gulf's financial markets, dipped on Friday with Brent crude falling 0.69% to $61.7 a barrel by 1136 GMT.
Looking at the broader picture, reduced tariffs could alleviate supply chain pressures, but analysts remain cautious. Prolonged trade tensions might still hinder Gulf IPO plans and non-oil exports. The recent performance of UAE markets indicates investors view the renewed dialogue as a step toward de-escalation, but the sustainability of this positivity hinges on the actual outcomes of the negotiations.
[1] Dubai Financial Market Reports 42% Surge in Q1 Net Profit, Arabian Business (May 1, 2025), https://www.arabianbusiness.com/companies/finance/dubai-financial-market-reports-42-surge-in-q1-net-profit-917218.html[2] UAE Indexes Rise as US-China Trade TalksHeat Up, Gulf Business (May 2, 2025), https://gulfbusiness.com/uae-stocks-rise-as-us-china-trade-talks-heat-up/[3] US-China Trade Developments Impact UAE Stock Market, Khaleej Times (May 3, 2025), https://www.khaleejtimes.com/business/stock-market/us-china-trade-developments-impact-uae-stock-market[4] Asian Markets, S&P 500 Futures Rise on US-China Trade Talks Optimism, Reuters (May 2, 2025), https://www.reuters.com/markets/asia/asia-stocks-china-us-trade-talks-2025-05-02/[5] Middle East Forging Ahead Despite US-China Trade Spat, Forbes (May 5, 2025), https://www.forbes.com/sites/johngallagher/2025/05/05/middle-east-forging-ahead-despite-us-china-trade-spat/?sh=773eab7a4805
- The Dubai Financial Market, a key stock exchange operator in the UAE, reported a significant 42% surge in its first-quarter net profit to AED127 million, signifying a healthy growth in the financial sector.
- In a positive move for the UAE stock market, Emaar Properties, a top real estate developer in Dubai, saw a 1.5% increase in its stocks, reflecting investors' willingness to invest in the market.
- Shoppers may find index funds that track the performance of the UAE's stock market, as the index followed an upward trend, extending its winning streak, with stocks like those of Emaar Properties and Salik Company surging.
- Lastly, as the US-China trade talks continue to progress, investors may consider adding securities like stocks from the industrial sector, such as Adnoc Drilling in Abu Dhabi, to their portfolios due to their potential for greater returns in the wake of reduced tariffs.
