In the fifties, when oil was just beginning to flow into the Persian Gulfcities like Dubai, Abu Dhabi y Doha They were far from boasting the dazzling skyscrapers that characterize their skylines today. These areas emerged as a refuge for large assets in the Middle East since the rise of Arab Spring. But in just over two weeks, the position of Dubai as the haven of the financial system in the region came under unprecedented pressure as the United Arab Emirates was caught in the crossfire of a regional war between Washington, Jerusalem and Tehran.
While the missiles launched from Tehran fell on Dubai For the first time, private bankers, wealth managers and finance professionals began making evacuation calls and plans. In just a few hours, many of these professionals were on board the last planes bound for places like Istanbul, Singapore o Jakarta. Or they locked themselves at home, instead of going to the offices of giants like JP Morgan o Goldman Sachs.
On February 28, as Iranian reprisals descended on Dubai and the airport was preparing to close, a private banker and his wife were on a plane leaving the airport. Gulf. “The longer it lasts, the more it will affect Dubai’s well-managed image as a safe haven,” explains this inverse, who prefers not to be identified, to EL PERIÓDICO. “In terms of market behavior, it is clear that we have observed a certain impact on the real estate sector and that this will undoubtedly cause a pause. We are talking about a drop in prices of 10% to 15%, but it is too early to know better,” he points out.
Increased risk
And this scare is already having an effect. a handful of family offices settled in Asia they have confessed to the agency Bloomberg who have been studying whether to reduce their exposure to Dubai and financial cities in the Gulf after the outbreak of the war. On paper, the impact is not yet something that can be quantified. He Dubai International Financial Center (DIFC, for its acronym in English), houses more than 5,500 multinationals, banks and management companies in the Emirati capital and is considered the financial heart of the United Arab Emirates. DIFC sources did not respond to this newspaper’s requests.
Although the peak of the scare occurred on February 28 —when a barrage of Iranian missiles fell on the Dubai International Airport— The favorite destination of great fortunes has endured countless attacks since the war broke out. The unknowns about the duration of the war and the possibility of longer damage to the petrodollars of the main Gulf economies have strongly shaken the main stock indices of Dubai.
Dubai DFM General Index —in which the largest bank in United Arab EmiratesEmirates NBD—, has plummeted more than 7.5% since the war began, dragging down the region’s banks. In parallel, the DFM Sharia Indexthe index that groups together the stock companies that comply with the principles of Islamic finance, has fallen more sharply: 8.6% since the start of the contest. The selective that houses the companies with the best scores in environmental, social and governance (ESG) criteria has also been punished, with a decline of around 6%.
He Central Bank of the United Arab Emirates keep calm. The monetary entity has indicated to investors that it is well positioned to face events in the region. “The banking and financial sector in the United Arab Emirates continues to maintain very strong levels of capital adequacy and liquidity,” he explained. Khaled Mohamed Balamathe governor of the central bank. “The capital adequacy ratio currently stands at 17%, while the liquidity coverage ratio exceeds 146.6%, both well above the regulatory thresholds recommended by international supervisory bodies.”
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