Finance
Why has the UAE closed its stock exchanges?
The United Arab Emirates has closed its main stock exchanges amid a widening conflict in the region following the United States and Israel’s attacks on Iran.
The UAE’s financial regulator on Sunday announced that its key exchanges in Dubai and Abu Dhabi would not immediately reopen after the weekend break amid the fallout of the US-Israeli attacks that killed Iran’s Supreme Leader Ayatollah Ali Khamenei.
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The announcement that the Abu Dhabi Securities Exchange and Dubai Financial Market would remain closed on Monday and Tuesday came after the UAE was hit with hundreds of Iranian missile and drone attacks, including a strike on Abu Dhabi’s main airport that killed one person and wounded seven others.
The UAE’s Capital Markets Authority said in a statement that it would continue to monitor developments in the region and “assess the situation on an ongoing basis, taking any further measures as necessary”.
Here is all you need to know about the move.
Why has the UAE decided to shut its main stock exchanges?
The financial regulator did not elaborate on the rationale for its decision, only saying that it was taken in accordance with its “supervisory and regulatory role” in managing the country’s financial markets.
While closing the stock market outside of scheduled breaks is relatively unusual worldwide, especially in the era of electronic trading, it is not unprecedented.
Typically, when financial authorities halt stock trading during a crisis, it is because they are concerned about panic selling.
During periods of extreme volatility, such as wars and financial crises, investors often rush to sell their holdings to avoid suffering big losses.
As investors sell their stocks, the market value falls further.
This dynamic can spur a vicious cycle that, left unchecked, can lead to a full-blown market crash.
Since the US-Israeli attacks on Iran, stock markets around the world have seen significant – though not catastrophic – losses, while oil prices have risen sharply.
Saudi Arabia’s benchmark Tadawul All Share Index fell more than 4 percent on Sunday, while Egypt’s EGX 30 dropped about 2.5 percent.
In Asia, major stock markets closed lower on Monday, with Japan’s benchmark Nikkei 225 and Hong Kong’s Hang Seng Index down about 1.4 percent and 2.2 percent, respectively.
The practice of shutting the market to prevent panic selling is controversial among economists and investors.
Closing the market prevents investors from accessing cash they might need in a hurry.
Critics also argue that such closures only exacerbate the sense of panic they seek to prevent and distort important signals about the market.
“Investors don’t like uncertainty, and at times of market stress, liquidity is most important. It appears the UAE just took that away,” Burdin Hickok, a professor at New York University’s School of Professional Studies, told Al Jazeera.
“This move has the potential of diminishing the status of Dubai as a true major market and weaken investor confidence in the Dubai markets. There has to be some concern about capital flight and negative ripple effects.”
Has this happened before?
The UAE has closed its stock exchanges before, though not due to regional conflict.
In 2022, the UAE halted trading as part of a period of mourning declared to mark the death of President Khalifa bin Zayed Al Nahyan.
The emirate announced a similar pause following the death of Dubai’s ruler, Sheikh Maktoum bin Rashid Al Maktoum, in 2006.
“Historically, to the best of my knowledge, no Middle Eastern state, including Israel, has closed its stock exchange during a time of regional conflict,” Hickok said.
“In prior conflicts, Israel has modified hours of their exchange, but we are talking hours, not days.”
Other countries have shuttered their stock markets during periods of major turmoil in recent years.
After Russia launched its full-scale invasion of Ukraine in 2022, authorities shut the Moscow Exchange for nearly a month.
In 2011, Egypt shut its stock exchange for nearly two months as the country was grappling with the upheaval of the Arab Spring.
After the September 11, 2001, attacks on the United States, the New York Stock Exchange and the Nasdaq halted trading for six days, the longest suspension since the Great Depression.
How important is the UAE’s stock market?
The UAE is a relatively small player in the world of capital markets, though it has made significant inroads in recent years.
The Abu Dhabi Securities Exchange and Dubai Financial Market have a combined market capitalisation of about $1.1 trillion.
By comparison, the New York Stock Exchange, the world’s biggest bourse, has a market capitalisation of about $44 trillion.
Saudi Arabia’s Saudi Exchange, the biggest exchange in the Middle East, is valued at more than $3 trillion.
Still, the UAE’s stature among financial markets has been on the rise.
Before the latest crisis, UAE-listed stocks had been on a winning streak.
The Dubai Financial Market General Index, which includes companies such as Emirates NBD and Emaar Properties, rose more than 29 percent in the 12 months to February 27.
Haytham Aoun, an assistant professor of finance at the American University in Dubai, said while the UAE could see some outflow of foreign capital, the country’s economy remains on a strong footing.
“A temporary stock market closure will have a limited impact on long-term economic variables, provided the fundamentals remain strong,” Aoun told Al Jazeera.
“In the UAE case, it’s a precautionary intervention, and not a sign of structural weakness.”
Why did you choose to attend Bentley?
I wanted to find a school that allowed me to combine both business and language.
I grew up working in my family’s restaurants in Western Mass., so I have been surrounded by business from an early age. As I got older and started working more intensely in this environment, I developed a real passion for the ins-and-outs of business.
On top of that, my grandparents are Chinese immigrants, so the Chinese culture has always played a big role in my life. Since I studied Mandarin Chinese starting in kindergarten, the ability to continue that at college was non-negotiable. When I toured Bentley, it all clicked and felt as though I’d be able to pursue all my interests to their fullest extent.
What stood out about the Language, Culture and Business major, and Finance minor?
What really drew me to Bentley’s Language, Culture and Business major was that it wasn’t just language studies — it also highlighted global perspectives and how to adapt to a highly globally connected business environment. At the same time, I was interested in the analytical and strategic side of business, which led me to the Finance minor.
Together, I believe they allow me to approach business problems and solutions from both a quantitative and human-centered perspective. My finance background gives me the technical foundation to analyze performance and then make strategic decisions, while Language, Culture and Business has helped me understand the people and environment that those decisions impact.
Are there specific Bentley professors or classes that helped you connect the dots between finance and culture?
Yes, several of the required courses for my Language, Culture and Business major really helped me understand how cultural context influences economic behavior, negotiation styles and decision-making. Pairing these skills with my finance courses allowed me to think more critically about how financial strategies play out in global markets and where cultural nuances can directly impact outcomes.
If I were to choose what course has impacted my choices the most, I would say Chinese for Business I (MLCH 201) and Chinese for Business II (MLCH 208) taught by Fei Yu, assistant professor of Modern Languages. I thoroughly enjoyed taking these courses because they made me realize that language can be applied to so many industries and made my aspirations to work internationally seem possible and within reach. I also gained important skills such as interview skills and resume skills.
At Bentley, there’s a strong culture of encouraging students to explore multiple interests and see how they connect for future careers.
Were there other campus experiences that helped blend your cultural and business interests?
Yes — being involved in organizations such as the Women’s Leadership Program and the Bentley Dance Team helped me work with diverse groups of people and develop strong interpersonal skills. Additionally, studying abroad in Florence, Italy, made me comfortable with change and sparked a new fire to continue learning about cultures other than my own.
It doesn’t seem to make a lot of sense, does it? Someone decides to go to war, the oil stops flowing, prices go up and our economy starts shutting down.
The best response we can come up with is to raise interest rates, to dampen demand a little more. As if doubling the price of petrol won’t do that enough.
Problem is, raising interest rates only hurts people with mortgages and renters, typically not high on the wealth ladder. People with no debt get more money, and will spend it. And the rising interest rates hurt the businesses that have already been hit. Just when we want to raise supply.
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Besides interest rates, standard macroeconomic thinking is there’s only one other lever. We could reduce net government spending, which is hard to do when you’ve just cut taxes on diesel and petrol, which will fuel demand just when you don’t want that to happen.
But there may be a third way. To our collective credit, Australia has set up what many regard as the world’s best superannuation system. As at December 2025, we had close to $4.5 trillion set aside for our futures. And, every hour of every day, 12% of our income is added to the pile.
It’s been suggested that the super guarantee levy might be used as the third ‘lever’ to modulate the economy, in addition to fiscal and monetary policy.
This was actually one of the arguments used when the levy was introduced back in 1992. Instead of giving workers a wage rise, which might trigger wage-inflation, Bill Kelty and Paul Keating negotiated a compulsory savings scheme. Workers would benefit, but not immediately.
Perhaps it’s worth revisiting that negotiation. Say you want to set the levy at 12% over the long term. When times are tough you might put the 12% rate down a little to stimulate the economy. Instead of a $100 wage and $12 in super, people get $102 for now and $10 for later. We get through.
Or, when inflation is running you might nudge the 12% up a little to constrain demand. The extra isn’t paid by business. Instead of the $100 wage and $12 in super, people get $98 for now and $14 for later. Given the cost of living crisis, maybe the lever only cuts in above a certain income.
This would arguably be fairer, easier and more effective than the interest rate sledgehammer. It would inject or remove the same amount of money from the economy. But the pain is spread, people keep their own money rather than paying it to the banks, and businesses aren’t hit by higher interest rates just when you want them to invest in their capacity.
Finance
Stress in private credit could spark ‘psychological contagion,’ Fed’s Barr tells Bloomberg News
May 3 (Reuters) – U.S. Federal Reserve Governor Michael Barr said stress in private credit could spark “psychological contagion” leading to a broader credit crunch, Bloomberg News reported on Sunday.
While direct links between banks and private credit do not yet appear “super worrisome,” there were other areas of concern such as the insurance sector’s overlaps with private lenders, Barr said in an interview with Bloomberg News.
“People might look at private credit, and instead of saying, ‘This is an idiosyncratic problem, these were high-risk loans, the rest of the corporate sector is different,’ they might say, ‘Wow, there seem to be cracks in our corporate sector. Maybe over here in the corporate bond market, there are also cracks,’” Barr said.
Barr also added that “then you could have a credit pullback, and that could lead to more financial strain.”
Private credit firms have been under stress because of the market’s recent downturn with some investors retreating from these investments due to worries about valuations and lending standards following a handful of high-profile bankruptcies.
Fed Chair Jerome Powell said in March central bank officials are watching developments in the private credit sector for signs of trouble, but do not currently see issues there bringing down the financial system as a whole.
(Reporting by Angela Christy in Bengaluru; Editing by Will Dunham)
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