• York Investment & Finance

Global Markets Overview: Middle East

Updated: Sep 11, 2020

By Anna Webb, Analyst at the York IFS Global Market Telegraph

From 31 August to 6 September 2020

Egyptian stocks rose 3.2% in the two weeks to end-August on the back of an expected recovery in the tourism sector, although this has fallen slightly in the last few days [1]. Kuwaiti stocks suffered in comparison due to concerns around oil price volatility and a stumbling economic recovery. In the month of August, Dubai’s DFM rallied the most with gains of 10%, with gains for many Middle Eastern stocks on the back of increased optimism of a vaccine and an observed US commitment to a US-China trade deal [2].  

Trump sealed a landmark accord between Israel and UAE this week, making the UAE one of only three countries to have ‘full normalisation of relations’. Mr Trump said this was a ‘significant step towards building a more peaceful, secure and prosperous Middle East’, although this brought backlash from opposite ideologies with Palestinians feeling abandoned by the Arab nation [3]. Despite this, UAE insist that burgeoning ties with Israel have not come at Ramallah’s expense and that Abu Dhabi still supports the establishment of a Palestinian state with East Jerusalem as its capital [4]. The prospect of a direct flight between the countries has excited Israeli businesses on the prospect of a wider market, having been attempting to trade with the UAE for many years. This is expected to have a positive effect on Israeli markets, although gains are yet to filter through [5]

Due to the predominantly desert terrain, the UAE struggles significantly with the domestic agriculture sector and is forced to import 90% of its food. With coronavirus, the country has struggled to keep up the inflow of food produce and import shortages become a more and more prominent risk. The UAE is now investing significant funds into agritech - technological solutions to try and increase food security, such as high-resolution maps that can help predict crop stresses [6]. Dubai has set up an agricultural trading platform, which aims to connect Indian farmers with Dubai companies to increase food security amid coronavirus disruption [7]. The ongoing food shortage concerns will weigh on Dubai’ markets, although hopes of advances in agritech can somewhat mitigate this.

By Anna Webb, Analyst at the York IFS Global Market Telegraph

This article was first published in University of York Investment and Finance Society's Global Market Telegraph (GMT) Edition 6 in early September 2020

[1] https://www.bloomberg.com/quote/KUCPIYOY:IND

[2] https://www.bloomberg.com/amp/news/articles/2020-08-30/gulf-stocks-head-for-best-month-since-april-inside-em

[3] https://www.google.co.uk/amp/s/www.nytimes.com/2020/08/13/us/politics/trump-israel-united-arab-emirates-uae.amp.html

[4] https://www.timesofisrael.com/uae-to-palestinians-we-still-back-palestinian-state-with-e-jerusalem-capital/

[5] https://www.bloomberg.com/quote/TA-35:IND

[6] https://www.ft.com/content/5ff72ce2-5947-497e-ac83-4aa4d008a73d

[7] https://www.bloomberg.com/news/articles/2020-08-26/dubai-sets-up-trading-platform-to-boost-food-imports-from-india

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