Dubai’s stock market led Gulf bourses higher in early trade on Sunday as investors reacted to Iran’s deal with world powers on its disputed nuclear programme.
If confirmed in a final agreement by a June 30 deadline, the nuclear deal could eventually hurt Gulf economies to some degree by lifting international sanctions and allowing more Iranian oil onto the market, pushing down crude prices. Brent oil plunged nearly four per cent on Thursday in an initial reaction to the deal.
But the agreement – if received positively by major Gulf Arab governments – could also reduce geopolitical tensions, encouraging more foreign portfolio investment throughout the region.
Dubai’s economy in particular would probably benefit as the emirate became a jumping-off point for foreign companies and traders going back into Iran.
The main Dubai stock index climbed 1.6 per cent in early trade on Sunday. Air Arabia, which could see increased business if transport links to Iran expand, surged 2.8 per cent.
Property shares dominated activity in Dubai with Damac, the most active stock, surging 8.9 per cent after the firm said it would consider taking an equity stake in a project to build a 50-storey mixed-use tower in central London – which would be its entry into the British market.
Shares in another likely beneficiary of an opening of Iran’s economy, Kuwait logistics firm Agility, gained 1.3 per cent. The Kuwait market index edged up 0.5 per cent.
Abu Dhabi’s market rose 0.7 per cent, led by blue chip First Gulf Bank, up 1.4 per cent, while Qatar edged up 0.3 per cent.