UAE equities ended 1Q in the red — but it rebounded yesterday. Dubai’s DFM shed 16.4% in March, posting its worst monthly drop since the pandemic, while Abu Dhabi’s ADX fell 8.9%, marking its steepest decline in six years, according to Kamco Invest’s GCC Markets Monthly Report (pdf). This came as the Iran war triggered a pullback from UAE exposure. Still, yesterday, the DFM rose 2%, and ADX gained 1.4%.

The 1Q picture: Abu Dhabi slipped 4.7% by the end of 1Q, while Dubai dropped 10.1%. Foreign investors turned net sellers to the tune of AED 1.06 bn across both markets, even as liquidity rose 22% y-o-y to AED 150.5 bn — a sign that flows were rotating out, according to data compiled by Alkhaleej.

Heavy churn on the ADX + dumping on the DFM: Total value traded on the ADX edged down 0.7% in March to AED 28.9 bn, even as volumes jumped 11.1% to 7.1 bn shares, according to Kamco Invest. Meanwhile, the DFM saw a liquidity surge driven by large-ticket selling, with total value traded rising 26.2% in March to AED 24.7 bn and volumes slipping 0.3% to 5.1 bn shares.

Just over the past week, Dubai saw USD 235 mn in outflows, while Abu Dhabi recorded USD 219 mn in outflows, Mashreq Capital said (pdf).

The biggest drag? The problem is shifting headlines, to which investors remain vulnerable, Mashreq noted. It’s also all about energy and logistics disruptions. “Investors are differentiating markets by perceived resilience of export access rather than near term earnings narratives,” it added.

By the sector

In both Abu Dhabi and Dubai, nine out of 10 indices closed March in the red. The ADX real estate index fell 27.8%, dragged down by RAK Properties (-32.8%) and Aldar (-27.9%). Healthcare followed, down 17.2%, while basic materials stood out as the only gainer, rising 5.0% on the back of Fertiglobe (+16.8%).

On the DFM, the real estate index dropped 27.4%, with all constituents in the red, led by Emaar Development (-30.2%) and Emaar Properties (-27.8%). Consumer staples followed with a 20.1% decline. Materials was the only bright spot, up 8.1%, supported by Naeem Holding (+15.0%).

How we’re faring against regional peers

Emirati equities lagged the broader region: Egypt’s EGX30 fell 7.9% in March as foreign investors stepped up selling, while Saudi Arabia’s TASI moved in the opposite direction, rising 5.05% on the back of higher oil prices and flows into large-cap energy and banking names.

ICYMI- Regulators are moving to shore-up the floor, including a resilience package courtesy of the Central Bank of the UAE to help boost liquidity, alongside a AED 1 bn Dubai stimulus package to protect two of the emirate’s growth engines: tourism and hospitality.

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