By: Bedour Al Raee and Enas Bahgat

Abu Dhabi – Mubasher: The UAE stock markets have been seeing a negative trend despite the strong incentives in the country including an AED 50 billion ($13.6 billion) investment package announced by the Emirate of Abu Dhabi and aimed at stimulating the GCC nation's economy.

This negativity was traced back to a slew of direct and indirect reasons, among them the trade war between the US and China, which affect both global and local markets, analysts told Mubasher.

In the last three sessions, the Abu Dhabi Securities Exchange’s (ADX) general index lost 164.44 points, or 3.49%, to 4,550.29 points, while the Dubai Financial Market (DFM) shed 115.66 points, or 3.8%, to 2,922.57 points in the same period.

The decline in the Emirati markets can also be the result of domestic factors, such as profit-taking and low liquidity, Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI), commented.

Investors in these markets tend to collect profits hastily lest markets will tumble on the back of any possible negative news whether locally or globally, Al-Taha added.

The geopolitical tensions and the proposed reduction of oil production have weighed on investors’ morale in the last sessions, the analyst said.

Three key factors will lead to the increase of oil output including the renewal of the US sanctions on Iranian exports, the various challenges and technical problems facing Venezuela, and the ongoing conflict in Libya, Al-Taha explained.

Moreover, NamaaZone CEO Iyad Aref noted that the potential increase of interest rates in the US could drag down markets and their liquidity and increase both cost of finance and personal loans in the coming period.

Translated by: Muhammad Khalid