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(Bloomberg) — Hedge funds, banks and insurers rushed to size up their exposure to the Middle East after weekend attacks on Iran fueled chaos across the region.
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Some of Taiwan’s largest life insurers, including Cathay Life Insurance Co. and Nan Shan Life Insurance Co., conducted internal reviews of their exposure to the Middle East over the weekend after news of the attacks broke, according to people familiar with the matter. Barclays Plc redeployed more than 30 people to work Sunday to cover New Zealand’s market open on Monday, which offered an early gauge of sentiment. Traders at Singapore-based Dymon Asia Capital were also awake to cover the Wellington open.
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Global funds and banks still have little visibility on what comes next, after a series of missile strikes by the US and Israel over the weekend killed the country’s Supreme Leader and hit defense sites. President Donald Trump called for Iranian citizens to rise up and take over the government, raising the possibility of a prolonged period of political turmoil.
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Oil jumped more than 13% at Monday’s open before giving back some of its gains, while risk currencies such as the Australian dollar and the New Zealand dollar slid. Haven assets such as the dollar and Treasuries rose in early trading but soon pared gains. Stocks in most Asian markets fell.
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The heightened focus on the Middle East — and the numerous questions about what the conflict could mean for markets — prompted banks to plan a series of client calls to game out next steps.
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Goldman Sachs Group Inc. will hold a call later on Monday when US markets open. Geopolitics and trading teams will cover the fallout across oil, risk assets, and emerging markets, the bank said. Speakers include Alex Younger, the former UK intelligence chief and senior leadership across key trading desks.
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Chinese brokerages including Guotai Haitong Securities Co. and China Galaxy Securities Co. held conference calls over the weekend to decipher how the situation will impact capital markets and cyclical sectors, according to schedules seen by Bloomberg.
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The conflict risks fueling wider questions about doing business in the Middle East, after Iran retaliated by launching its own missiles at US bases and allies around the region, including in the United Arab Emirates, Qatar, Kuwait and Saudi Arabia.
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Plumes of black smoke were seen in Dubai, long the go-to venue for global banks and funds looking for a base in the region. Multiple flights were suspended after the main airport was hit by a suspected aerial strike.
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“It could be a wake-up call that could have a longer-term impact on where family offices want to put their money,” said Patrick Yip, Asia vice chair at Mishcon de Reya LLP. “Some of our clients can’t even leave Dubai given the airport is closed. They are afraid for their safety. They had never thought that possible in Dubai.”
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Barclays didn’t immediately respond to a request for comment. Cathay Life and Nan Shan Life declined to comment.
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