Qatar Stocks Climb the Most in Mideast as Gulf Tension Eases

Qatar’s benchmark stock index rose the most in the Middle East on signs of an easing a dispute that split the Gulf region for three years.

“For Qatar, even a partial removal of restrictions is positive,” said Hasnain Malik, the Dubai-based head of equity strategy at Tellimer. The country’s “investment case is relatively attractive” due to its high sovereign wealth per citizen and low fiscal breakeven oil price, he said.

The main stock index closed 1.4% higher, with most of the 20 members gaining. Meanwhile, Saudi Arabia’s Tadawul All Share Index rose 0.2%.

The food and beverage, construction and services sectors could be among the beneficiaries of the reopening of Saudi borders with Qatar, according to Mazen Al-Sudairi, head of research at Al Rajhi Capital in Riyadh.

Saudi Arabia on Monday decided to open its borders with the gas-rich Qatar -- ahead of a summit of regional leaders in Saudi Arabia on Tuesday. Qatar’s ruler attended the meeting for the first time since the 2017 row that cut trade, travel and diplomatic ties with its neighbors.

Publicly listed Gulf airlines, Kuwait-based Jazeera Airways Co. and Sharjah-based Air Arabia PJSC, will benefit from the resolution, according to Talal Samhouri, senior portfolio manager at Doha-based Aventicum Capital Management Qatar LLC. Qatari Shariah-compliant banks could also get a boost “as they used to get a lot of cheap funding from UAE and KSA, which will reduce their cost of funds,” he said.

The yield on Saudi Arabia’s $6.5 billion bond maturing in 2046 rose for a fifth day. Qatar’s $3 billion debt maturing in 2030 was little changed.

The resolution has wider economic and financial implications for Qatar, the world’s largest exporter of liquefied natural gas and one of the richest countries per capita. It is expected to bolster prospects for Qatar’s non-oil economy over the medium term, according to Fitch Ratings.

Elsewhere in the Gulf, Dubai’s main index climbed 1.2% for the session, while Abu Dhabi’s ADX index rose 0.6%.

“Dubai has under-performed Abu Dhabi especially during the past year,” said Ali El Adou, head of asset management at Dubai-based Daman Investments. “The current out-performance of Dubai is due to the sensitivity of its economy toward cyclical sectors.”

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