A cause for celebration for emerging market equities is on pause after the two-week ceasefire agreement between the US and Iran was rocked by Israeli strikes on Lebanon and Iranian strikes on the Gulf.

ICYMI- Equity markets in our neck of the woods had rallied immediately after the ceasefire news, with Egypt’s EGX up 4.1% at the end of trading on Wednesday, Saudi’s Tadawul closing up 2.3%, and UAE equities catching a break with their biggest intraday rally in twelve years. The EGP also gained roughly 2.5% on the greenback, with analysts predicting recovery momentum could hold.

But it didn’t last too long. The ceasefire cracked and EM markets slumped, with currencies and equities dipping for the first time in five days, Bloomberg reports. The MSCI Index tracking equities in developing nations was down 0.9%, and EM currencies were down 0.3%. Energy import-dependent markets in Asia drove the slump, as movement through Hormuz stayed sticky.

EMs were hit by a massive rout at the start of the war, with Institute of International Finance data showing that USD 70.3 bn was pulled from EM assets, with USD 56 bn pulled just from EM stocks. Meanwhile, the USD clawed its way back as the safe haven of choice for investors.

Pockets of resilience are pushing a neutral outlook for EMs: In its latest Weekly Market Commentary, BlackRock’s Wei Li wrote that the firm is opting for a policy of “quality and selectivity” when it comes to EMs, pointing to pockets of resilience from net energy exporters helping to buoy emerging market equities.

The asset management giant is also bullish on EM USD-denominated debt, shielding from currency volatility, markets that are relatively shielded from the regional conflict, like South America, and infrastructure assets linked to the AI buildout.

Will the recovery pick up again? For now, the risks are still there but are being offset somewhat by the ceasefire, Generali Asset Management’s Guillaume Tresca told the news outlet. Confidence is still low, and volatility is high, with analysts slashing predictions of interest rate cuts.

MARKETS THIS MORNING-

Asian markets continued to gain this morning despite the fragile ceasefire, with Japan’s Nikkei gaining 1.8%, as the country plans to release 20 days’ worth of oil reserves from May, South Korea’s Kospi up 1.7%, and China’s CSI 300 gained 0.6%. Hong Kong’s Hang Seng was also up 0.9%. Meanwhile, Wall Street futures are down.

ADX

9,836

-0.3% (YTD: -1.6%)

DFM

5,694

-1.5% (YTD: -5.8%)

Nasdaq Dubai UAE20

4,714

-1.6% (YTD: -3.6%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

3.5% o/n

3.9% 1 yr

TASI

11,343

+0.0% (YTD: +8.1%)

EGX30

49,079

+1.0% (YTD: +17.3%)

S&P 500

6,825

+0.6% (YTD: -0.3%)

FTSE 100

10,603

-0.1% (YTD: +6.8%)

Euro Stoxx 50

5,896

-0.3% (YTD: +1.8%)

Brent crude

USD 96.41

+0.5%

Natural gas (Nymex)

USD 2.68

+0.3%

Gold

USD 4,782

-0.4%

BTC

USD 72,393

+2% (YTD: -18.4%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.56

-2.7% (YTD: -0.8%)

S&P MENA Bond & Sukuk

150.36

-0.1% (YTD: -1%)

VIX (Volatility Index)

19.49

-7.4% (YTD: +30.4%)

THE CLOSING BELL-

The ADX fell 0.3% yesterday on turnover of AED 1.1 bn. The index is down 1.6% YTD.

In the green: Fujairah Building Industries (+9.0%), Aram Group (+4.4%), and Orascom Construction (+4.0%).

In the red: Ooredoo (-5.0%), E7 Group PJSC Warrants (-4.8%), and Sharjah Cement and Industrial Development Co. (-4.5%).

Over on the DFM, the index fell 1.5% on turnover of AED 1.1 bn. Meanwhile, Nasdaq Dubai was down 1.6%.

Corporate actions

Salik shareholders approved the board’s recommendation of a AED 890.3 mn dividend payout — equivalent to 11.9 fils per share — for 2025, according to a press release (pdf). The payment is scheduled for 27 April.

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