The financial markets of the country retreated yesterday, influenced by the performance of its global counterpart, as the general index of the Dubai Financial Market fell by 7.96% at the level of 2032 points, giving up gains of 176 points, while the general index of the Abu Dhabi Stock Exchange fell by 7.4%, and broke the barrier of 4000 points and closed At the level of 3922 points.

For their part, financial analysts made a number of urgent proposals to maintain the performance of the market and not deepen its losses, influenced by external factors, foremost of which is the spread of the Corona virus and a pandemic by the World Health Organization, along with fears of declining rates of global economic growth and falling oil prices.

They explained to «Emirates Today» that the financial markets are witnessing exceptional circumstances that require quick and bold decisions, proposing to reduce the minimum rate of decline to revolve between 2 and 5% instead of 10 to 15% currently, in addition to the need for government funds to purchase and create a balance that motivates investors to enter and reassure Their fears.

They also said that it is important to accelerate the implementation of the decisions and initiatives of the Securities and Commodities Authority, foremost of which is coordination with the Central Bank regarding the non-forced sale of mortgaged shares.

Money markets

In detail, Mohamed Ali Yassin, Chief Executive of Strategies at Al Dhabi Capital, said, “The declines in the local financial markets are a continuation of influencing external factors, such as the performance of its global counterpart and its strong fluctuations, especially the American market, with which our markets interact with only during times of decline. He ignores his highs and his gains, which could reach 1200 points, and this is what has happened recently repeatedly.

Yassin added that «the Securities Commission has taken a number of important steps such as the continued holding of general assemblies and dividends, but there are proposals that need quick and bold decisions, such as reducing the minimum decline to 5% instead of the 10 or 15% currently in place, in order to control the factors Foreign Affairs and not leaving the markets hostage to them, besides persuading the shareholding companies to buy their shares effectively, as well as relieving the pressure on margin trading investors and not forcibly liquidating their shares by banks, and this necessitates speeding up coordination with the central bank to put the Authority’s initiative into practice.

Yassin emphasized that "the financial sector in the UAE is strong, but it needs exceptional decisions to deal with unfavorable global conditions, such as expectations of an economic slowdown due to corona and oil price declines."

Yassin pointed out that global governments have pumped billions of dollars to stimulate the economy and support sectors affected by the Coruna virus.

And that the market makers in our local markets do not have enough capital to enter in such current conditions to restore balance to the market, so the need for quick government measures becomes the solution.

Exceptional circumstances

In turn, the financial markets expert, Dean Kanaan said, "The financial markets are going through exceptional circumstances that require decisions on the same amount, such as reducing the minimum downward to 2%, for example, in order to preserve the market value of shares," stressing that the markets lost billions of dirhams from the market value during Previous sessions and this must be stopped by bold decisions.

Kanaan stressed that accelerating the implementation of the Securities and Commodities Authority's initiatives regarding margin traders is necessary and important, stressing the expected role of the Central Bank in this regard.

And that the external factors are affecting our domestic markets, even though the return on each dirham of an investment in the market reaches 10% and the profitability four times, the fears of slowing economic growth and oil prices with the upper hand in the decisions of individual investors.

Kanaan stressed the importance of entering government funds such as pension funds and others to create a balance in the absence of the role of market makers.

In turn, financial analyst Rami Elias said, "There is a need for government funds to enter a balance that preserves the capabilities of the markets and protects them from the fluctuations of factors influencing externally, which play a big role in increasing the fears of individual investors", stressing that the crisis experienced by the financial markets globally and with them Our local markets are economic, not financial, and are linked to the outbreak of the Coronavirus, which is considered a pandemic by the World Health Organization, and the consequent fears for economic growth. He stated that the exceptional role of government funds is evident in such crises, and no one else can play this role.

- Claims to accelerate the implementation of the decisions and initiatives of the Securities and Commodities Authority.