Dubai Stocks Rally to Best Quarter Since Mid-2025 as War Premium Recedes
The DFM General Index rallied over 15% in Q2 as the geopolitical risk discount tied to regional conflicts receded, reversing months of underperformance. Improved investor sentiment and foreign inflows accelerated the gains, with banking and property stocks leading the charge. The easing war premium lifted valuations that had compressed during the period of elevated tensions.
- ▲ Ebbing of geopolitical risk premium tied to regional conflicts
- ▲ Return of foreign institutional liquidity to Gulf markets
- ▼ Re-escalation of Middle East tensions that reintroduce the war premium
- ▼ Global risk-off shift from a hawkish pivot by major central banks
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How much has the DFM General Index gained this quarter and what’s the outlook?
The index is up over 15% in Q2 2026, its best quarterly performance since mid-2025, and could extend gains if the war premium continues to fade and oil prices remain stable. Technical resistance stands at the 4,200 level.
What stocks are driving the DFMGI rally?
Emaar Properties and Emirates NBD are the top contributors, benefiting from improved risk appetite and a recovery in Dubai’s real estate and banking sectors. Other gainers include Dubai Islamic Bank and Emaar Development.
Is the DFMGI still undervalued after this rally?
Despite the surge, the index trades at a forward P/E of 10.2, still below its 5-year average of 11.5, suggesting room for further re-rating if geopolitical risks continue to subside.