The easing of geopolitical tensions and a shifting energy landscape are creating a more constructive environment for investors across the UAE and the broader Middle East, according to Standard Chartered.
The bank believes that the temporary understanding reached between the United States and Iran, coupled with a moderation in oil prices, has helped reduce the risk premium that had weighed on regional markets. As a result, investor confidence is expected to strengthen heading into the latter half of 2026.
Ayesha Abbas, Managing Director and Head of Affluent and Wealth Solutions for Europe, the Middle East and Africa, as well as the UAE at Standard Chartered, said investors in the Emirates are approaching the second half of the year from a position of resilience. She noted that favourable liquidity conditions and a more stable oil market continue to underpin the region’s investment outlook.
According to the bank, wealthy investors are increasingly favouring diversified portfolios that blend global growth opportunities with defensive income-generating assets. Demand remains strong for international equities, emerging-market dollar-denominated bonds and gold, which continues to serve as a hedge against uncertainty.
Abbas stressed that maintaining diversification and remaining invested will be critical for UAE-based investors seeking to benefit from evolving market conditions and emerging opportunities.
Standard Chartered’s latest Global Market Outlook for the second half of 2026 highlighted that global equities have gained more than 12% since the start of the year. Strong corporate earnings and enthusiasm surrounding artificial intelligence have helped propel markets higher despite geopolitical flashpoints, elevated bond yields and fluctuating energy prices.
While the bank expects the rally to continue, it cautioned that investors may need to be more selective and adaptable as markets respond to four major influences: energy prices, the supply of equities entering the market, investor positioning and central bank decisions.
Oil remains a particularly important variable for Middle Eastern economies. The report suggests that softer geopolitical concerns and lower crude prices are creating a more favourable setting for risk assets, allowing investors to shift their attention back toward growth-oriented sectors and markets.
Lower energy costs could also help ease inflation pressures while supporting corporate profitability. However, the bank warned that the recovery in physical oil demand and inventory replenishment is likely to be gradual, meaning energy prices may not quickly return to levels seen at the beginning of the year.
That trajectory, Standard Chartered said, will remain a key factor influencing inflation expectations, asset allocation decisions and investment opportunities throughout the remainder of 2026.
