Report Summary

Global markets exhibit high volatility, with the VIX climbing from 16 to 20. Bitcoin’s drop into the 75,000 range is weighing on tech stocks. In the UAE, banks and real estate have led a strong rally, yet analysts foresee a nearing peak. Liquidity may pivot soon toward smaller names. Investors remain cautious as March historically brings softer market performance, and upcoming earnings and macro data could further shape near-term direction.

UAE Markets

UAE Market Outlook: Strategic Rotation & Resistance

Approaching the Cycle Peak: Having driven a substantial rally through our core large-cap banking and real estate holdings, we believe the current upswing is nearing its final stages as quarterly earnings are fully priced in.
Anticipating Seasonal Softness: We are bracing for imminent profit-taking, noting that historical patterns indicate a typical softening of both Abu Dhabi and Dubai markets as we head into March.
Executing Mid-Cap Shifts: We expect liquidity to transition out of heavyweight leaders; consequently, we are monitoring second-tier and smaller-cap issues for entry points if the primary drivers begin to stall.

Quick Take – Borouge FY 2025

Profit fell versus last year, not because the company sold less, but mainly because selling prices and profit margins were weaker.
Even with the drop, the business is still highly profitable and generates strong cash from day-to-day operations.
The company spent much more on investments/projects in 2025, which reduced the “cash left after spending” (free cash flow).
Dividends were very large and higher than net profit, so keeping this level depends on continued strong cash generation and stable market conditions.

Global Markets

US Market Outlook: Tech Retrenchment and Tactical Hedging

Broad Market Retreat: On February 3, 2026, major US indices experienced a sharp downturn, with the Nasdaq Composite and S&P 500 sliding 1.4% and 0.8% respectively, as an early rally in the Dow—which briefly touched a new all-time high—succumbed to heavy selling pressure in the tech sector.
Magnificent 7 Under Pressure: We observed significant weakness across the tech giants, as all "Magnificent Seven" stocks closed lower; notably, Microsoft (MSFT) and NVIDIA (NVDA) fell 2.9% and 2.8% as investors actively rotated out of high-valuation growth names into defensive sectors and value stocks.
Crypto Correlation & Volatility: Bitcoin-related equities faced a brutal session following Bitcoin’s slide to a 10-month low near $74,500; crypto-proxy Strategy (MSTR) fell sharply as its holdings briefly slipped into an unrealized loss, while Coinbase (COIN) and the iShares Bitcoin Trust (IBIT) tracked the broader crypto sell-off with drops exceeding 2%.
Strategic Position in QQQD: Given the intensifying "AI bubble" concerns and the breach of key support levels in mega-cap tech, we believe it is an opportune moment to take a tactical position in the Direxion Daily Magnificent 7 Bear 1X Shares (QQQD) to hedge against further downside in the index's core leaders.

Investment Recommendations

Space42 (SPACE42): Buy at 1.60, target at 1.70, stoploss below 1.57.