Markets are calm, but streets are empty in spooked Gulf
Actions are increasing and oil is declining, a sign that investors consider that the United States strikes on Iranian nuclear sites as a single-off or a step towards diplomacy.
On the other hand, the best Japanese banks evacuate the Gulf staff, while European investment funds cancel trips to the region.
In Dubai, however, there is just a strange calm.
DIFC traffic is the scourge of bankers and the fodder for the headlines, but I went smoothly in the financial district today. I asked the workers if he was unusually calm, and they gave banal explanations that foreigners in Dubai use to avoid political comments – the long weekend to come (it’s four days), the school came out (it is not) – before admitting their concern: and if it degenerates and they are stuck?
Rajesh Khanna, CEO of Wealthbrix Capital Partners (he launched today), said that the United Arab Emirates had demonstrated his “resilience” and indicated the reaction of the market as an indicator of feeling. It expects the country to continue to attract millionaires and their money.
Gulf states call for calm. They are in the line of fire if Iran decides to hit us bases on their territory. The issues are high: any disturbance in the region’s navigable waterways – in particular the Hormuz Strait, which has all the energy exports of Iran, Iraq, Kuwait and Qatar, as well as important volumes of Saudi Arabia and the United Arab Emirates – could plunge the global economy into the recession. A worst case for the region is contaminating the only source of water in the Gulf.
The likely path is a calibrated Iranian response intended to ensure the survival of the regime. In this scenario, the Gulf countries can be faced with short -term investment breaks and consumer assaults, higher oil income compensating for part of the pain.
It is impossible to make an appeal on what the 86 -year -old supreme Iranian chief – who has lost most of his nearest advisers and perhaps his nuclear project for several decades – will decide. So far, smart money is still on the market, but the owners of wealth can move themselves and their families, somewhere safer.
