Dubai International Airport Was Hit. Here’s How the Dubai Stock Market Survived

When the first calls started coming into the Capital Markets Authority offices, the smoke had just cleared from the apron at Dubai International. There was a burning berth at Jebel Ali. Of all places, the Burj Al Arab had sustained damage from interceptor fragments falling back. Additionally, a Lebanese fund manager admitted later that he was updating his terminal every fifteen seconds somewhere on the 18th floor of a glass tower along Sheikh Zayed Road. Regulators had made the decision by Sunday night. On Monday, neither the Abu Dhabi exchange nor the Dubai Financial Market would open. They wouldn’t open on Tuesday either.

The markets took notice of this unusual move. Such closures are typically not used for missile attacks, but rather for the mourning of a head of state. Even though regulators wouldn’t state it clearly, the reasoning was clear: panic-selling in a Gulf market with little trading would have been disastrous given footage of a burning runway at the busiest international airport in the world. Thus, they kept the door closed. As damage assessments came in from both emirates, billions of dollars’ worth of listed assets just sat there, frozen, for 48 hours.

Dubai’s main index saw its worst intraday decline since May 2022, when trading finally resumed on March 4, falling 4.7% in a single session. The bluest of blue chips, Emaar Properties, saw a nearly 5% decline. Emirates’ NBD fell by 5%. The same retreat was made by Air Arabia. The figures were unattractive. However, the floor held, and this is the part that is obscured by the headlines. No cascade was present. No structural fracture. By the end of the month, Abu Dhabi’s market capitalization had dropped by $75 billion and DFM’s by about $45 billion, but the bourses continued to operate. It was still settling. Brokers continued to answer the phone.

Speaking with locals gives me the impression that this result wasn’t coincidental. Contrary to the airport-and-tourism stereotype, Dubai’s economy is more diverse. The Jebel Ali Free Zone alone transports more cargo than the combined trade volumes of most nations. The DIFC continues to take in money that is covertly leaving more severely affected areas of the region, such as Russian funds that have been parked there since 2022, Iranian wealth in exile, and savings from Lebanon. It’s difficult to ignore the pattern. A nearby conflict breaks out, headlines declare that Dubai is over, and a few weeks later, the property registry records yet another surge in cash sales.

Not everyone is persuaded. The closure itself could harm Dubai’s reputation, according to Burdin Hickok of NYU, who told Al Jazeera that liquidity is especially important when investors are afraid. There is a component to that. It’s similar to cutting the phone lines because you don’t want bad news when you close a market to stop panic. Until it doesn’t, it functions. Additionally, Hannah Ellis-Petersen’s on-the-ground reporting for The Guardian revealed British teachers boarding flights without scheduling returns, taxi drivers loading suitcases, and beach clubs that were only partially occupied. She was informed that Zain Anwar, the Pakistani driver whose vehicle was destroyed during the attack on the Fairmont on the Palm, was considering permanent departure. “Everybody knows that Dubai is finished,” he declared. He might prove to be mistaken. The majority of wagerers have been against this city.

However, the situation appears to be more complicated than either story. Yes, the Dubai stock market has survived, but that is a low standard. The more important question is whether the foreign investment that constructed this facility continues to have faith in the arrangement now that the missiles have momentarily survived. Standard Chartered and Citi have already laid off employees. According to a press release, tourism, which brought in $70 billion to the UAE last year, won’t recover. As one longtime resident put it, “the shine has been taken off.” For Dubai, shine has always been a component of the product.

You wouldn’t necessarily know any of this if you were strolling through the DIFC last month, though. The lines for coffee have returned. The valets are operational. AED 280 million was paid in cash for a penthouse in Downtown; the broker informed me that there would be “no negotiation, closed in a week.” It’s unclear if that’s denial or confidence. It’s probably a little bit of both.