Report Summary

Markets face heightened geopolitical uncertainty as potential U.S. military action and regional tensions evolve. The Dubai market may witness a short-term correction of about 6–8% if any escalation occurs. Nonetheless, a swift rebound is likely if the event is brief. Current strategy favors reducing overall equity exposure to around 30% while retaining cash to seize dip-buying opportunities, particularly in select leading names.

UAE Markets

UAE Market Outlook: Geopolitical Risk and Tactical Positioning

Geopolitical Vulnerability: While UAE markets have maintained a positive trajectory following a December rebound, they remain sensitive to regional tensions which could trigger a 6-8% short-term panic sell-off.
Defensive Portfolio Weighting: To mitigate "overnight risk" (unpredictable news gaps between trading sessions), it is recommended to maintain a reduced equity exposure of approximately 30%.
Intraday Trading Focus: Investors are encouraged to capitalize on current upward momentum through intraday strategies, allowing for gains while avoiding the risks of holding large positions during non-market hours.
Blue-Chip Stability: Large-cap "blue-chip" stocks are expected to be the most resilient against geopolitical shocks, making them a preferred anchor for the remaining equity portion of a portfolio.
Seasonality vs. Sentiment: Despite a strong start to the year following historical seasonal trends, market performance is currently more susceptible to external sentiment than internal economic fundamentals.

Global Markets

Mixed Results and Sector Rotation: The major indexes finished the day in different directions. The Nasdaq (+0.16%) was the only gainer, buoyed by a return to Big Tech and AI stocks. In contrast, the Dow Jones (-0.94%) and S&P 500 (-0.34%) fell as investors pulled money out of banks and traditional blue-chip companies.
Tech Leaderboard Shakeup: In a historic shift, Alphabet (Google) surpassed Apple in total market value for the first time since 2019. Alphabet rose 2.5% on continued AI optimism, while Apple hit a two-month low, weighed down by news that JPMorgan Chase might take over the Apple Card program from Goldman Sachs.
Geopolitics and Labor Anxiety: Investors remained cautious due to ongoing tensions in Venezuela and Iran, which helped push oil prices up to $57 per barrel. Most of the market's "big money" stayed on the sidelines ahead of tomorrow's Nonfarm Payrolls (NFP) report, which will provide the final word on the health of the U.S. economy for the week.

News

Taaleem Holdings reported Q1 FY2025/26 revenue of AED 369.9 million, up 20.9% year-on-year, supported by a 12.8% increase in premium school enrolments, while net profit declined 13.9% to AED 71.3 million due to higher financing and start-up costs.

Investment Recommendations

Abu Dhabi Commercial Bank (ADCB): Buy at 14.65, target 15.20, stoploss below 14.45.
First Abu Dhabi Bank (FAB): Buy at 17.75, target 18.35, stoploss below 17.55.