Qatari stocks have risen to record levels since Tuesday as the three-year-dispute between Qatar on the one hand and Saudi Arabia, UAE, Bahrain and Egypt on the other hand, came to an end.
“For Qatar, even a partial removal of the restrictions is positive,” said Hassanein Malik, head of share capital strategy at the Dubai-based Tellimer.
He said “the investment situation in the country is relatively attractive” due to the high sovereign wealth per citizen and the low fiscal breakeven price of oil.
The main stock index closed 1.4% higher. Meanwhile, the Saudi Tadawul Index rose by only 0.2%.
Mazen Al-Sudairy, head of research at Al-Rajhi Capital in Riyadh, said the food and beverage, construction and service sectors may be among the beneficiaries of the reopening of the Saudi border with Qatar.
Saudi Arabia decided last Monday evening to open its borders with gas-rich Qatar ahead of the gulf summit in Saudi Arabia, which was held on Tuesday.
The Emir of Qatar attended the summit for the first time since 2017.
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 the fifth day.
There has been little change in Qatar’s $ 3 billion debt maturing in 2030.
The decision 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.
The agreement is expected to enhance the prospects for the Qatari non-oil economy in the medium term, according to Fitch Ratings.