Stock exchanges in the Middle East’s commercial capital will soon operate Monday through Friday after the United Arab Emirates decided to align its work week with the global norm, in a push to drum up international investment and business.
The financial sector will be the primary beneficiary of the UAE’s move to shift away from the Middle Eastern work week of Sunday through Thursday, Abdulrahman Al Awar, director general of the Federal Authority for Government Human Resources, said in a Bloomberg TV interview on Wednesday.
“The banking and financials sector will benefit from this because we are eliminating the weekend gap that previously existed,” Al Awar said. “We are now aligned with the world’s economies.”
The UAE is adopting new business practices as it seeks to reposition itself as a global business hub and fend off increasing competition regionally from energy powerhouse Saudi Arabia. The rivalry has spurred the UAE to speed up changes aimed at attracting foreign talent and strengthen trade ties beyond the Middle East, including more relaxed residency requirements.
The new 4 1/2-day work week, which includes shortened hours on Friday, Islam’s holy day, applies to the public sector. But with schools almost sure to follow suit, it’s likely only a matter of time before the private sector falls in line, analysts have predicted.
Under the shift, the state-controlled stock exchanges in Dubai and Abu Dhabi will operate from Jan. 3 between 10:00 a.m. and 3:00 p.m. from Monday to Friday. Trading hours will not change.
“Friday will be a full business day for the stock markets,” Al Awar said. “The decision is made to invest in the competitiveness of the UAE economy and to enhance productivity.”
Market operators in the UAE have already introduced changes in recent months, including extending trading hours and offering incentives for companies to sell shares to the public.
While the change in equity-market hours aligns the UAE with much of the rest of the world, it distances it from regional competitors such as Saudi Arabia, leaving traders and investors to strike a balance between the two at a time when working practices worldwide have been upended by the pandemic. The Saudi bourse, the largest in the Middle East, trades Sunday through Thursday.
The one-day gap between the Saudi market and the rest of the world hasn’t been a concern for international investors, said Khalid Al-Hussan, chief executive officer of the Saudi stock exchange in an interview with Bloomberg TV.
“Having said that, we always keep a very close eye on changes around us, that includes our trading hours, that includes our trading days,” Al-Hussan said. “This is a decision that has to be assessed by the government.”
In Israel, which officially hews to the Sunday through Thursday week, the powerful technology sector would welcome such a shift. Its employees often find themselves working six days a week to conform with both their country’s schedule and that of clients and partners abroad.
“It’s a hugely positive move to align the markets and work week with the rest of the world,” said Avi Eyal, managing partner at Entrée Capital, a venture capital fund that has invested in four UAE companies. While the shift won’t affect burgeoning trade ties with the UAE, Israel should “learn from this decision and implement the same approach immediately,” he said.
–With assistance from Farah Elbahrawy, Yaacov Benmeleh and Shaji Mathew.