UAE-Qatar ties: Reopening of borders to benefit UAE
The UAE’s decision to resume trade relations with Qatar has been received with great optimism among the business community here, as the historic deal is poised to see resumption of previous investment and trade opportunities between nations. The restoration of travel and trade links between the UAE and Qatar is set to revive an era of vibrant trade and investment between the two countries.
UAE property sector to benefit
With the UAE-Qatar bilateral trade resumption, experts widely view that the real estate and construction sector in the UAE stands to profit, as Qatar gains further access to sectors in the emirates. A rush of investments is eyed between the countries upon the borders and trade opening up again, which is a much-needed boost for the UAE infrastructure industry, which has many projects on hold. There is rising demand in Dubai’s property market, with real estate seen rebounding and buyers set to capitalise on low prices – making the latest developments viewed as aptly-timed for the real estate sector.
The agreement will once again allow visitors to Qatar from Saudi Arabia, Bahrain and the UAE, which accounted for almost 40 per cent of total visitors prior to the dispute. Over the medium-term, the normalisation of relations will allow regional football fans, especially from Saudi Arabia, to attend the 2022 FIFA World Cup. It will also allow Qatar Airways to resume flights over the rest of GCC. A resumption of travel links will eventually lift tourism inflows, and greater interest from regional buyers could support the real estate market, which has been in a multi-year downturn.
Stock markets, economies to profit
Qatar’s stock markets, sectors and economy stand to equally benefit as well. Standard Chartered now sees Qatar’s economy growing 3 per cent, revising upward its previous growth target of 2.1 per cent – higher than the 2.2 per cent forecast Qatar gave last month in its 2021 budget.
Apart from this, and with new markets now opening in both Israel and Qatar, multiple Dubai-based analysts predict a “very” bullish UAE stock market during the ongoing first quarter with a rush of investors looking set to take advantage of new opportunities - a benefit that is seen from a business standpoint as well.
Investors in UAE, Qatar cheer move
While Dubai’s blue-chip benchmark gained in four of the five sessions last week to post a weekly gain of 5.4 per cent, the Abu Dhabi index ended 2.4 per cent higher for the week. Dubai unveiled its fifth stimulus package, worth Dh315 million to counter the economic impact of the COVID-19 pandemic.
Moreover, another factor aiding both stock markets is the rising price of oil. Crude hit its highest since late February after a fall in US stockpiles added further support following Saudi Arabia’s unilateral decision to cut output.