Editor's note: John Defterios is CNN's Emerging Markets Editor and anchor of Global Exchange, CNN's prime time business show focused on the emerging and BRIC markets.
(CNN) -- It was long time waiting on standby but both the United Arab Emirates and Qatar did get what they were looking for; an upgrade to emerging market status from the more risky rating of frontier market.
Investors cheered the news from the emerging markets index MSCI. On yet another dismal day for emerging markets, Dubai, Abu Dhabi and Doha rallied again. They have been stellar performers for the past year.
At the same time, MSCI announced that a developed nation is being downgraded for the first time.
Greece's fate was sealed by the 90% plunge of its stockmarket since the start of the financial crisis. It also failed to meet a number of criteria set out during a review which started a year ago.
The UAE has been lobbying since 2008, so one could say the fifth year is a charm. This process however required some fundamental changes to operations within the Dubai, Abu Dhabi and Doha financial markets.
These changes included technical delivery and payment systems, liquidity requirements, sector diversification and a higher level of foreign ownership in listed companies.
"They have actually ticked a lot of boxes that previously were stopping the UAE and Qatar," according to Saleem Khokhar of National Bank of Abu Dhabi Asset Management.
These are still small volume markets with turnover around $350 million a day, but that is a five-fold increase from where they were when applications came in.
I have visited all three of the trading floors and it is not unusual to find a dozen traders on high quality, leather lounge chairs with their traditional white khanduras sipping tea while placing trades.
It is an altogether different look and feel from New York, London or Tokyo, but money is being made.
Dubai is up 70% in the past 12 months, Abu Dhabi 54% and Doha around 20%.
However this "is absolutely not about the MSCI emerging market upgrade," Khokhar said. "I would say it is more about the fundamentals."
But now that all three are part of this club, strategists say one should expect a knock on effect. HSBC has conducted an investment review predicting that the UAE could see capital flows increase by $370 million per year after the decision comes into place in 2014; Qatar rising by $430 million.
According to MSCI, $1.5 trillion is earmarked by fund managers into emerging market assets.
"The move is a major sign of approval from institutional investors for the countries' stock markets, and is expected to attract more stable sources of capital to local equities," Kuwait's Global Investment House said in a note to investors after the decision.
The UAE and Qatar seem far removed from the post-Arab spring countries, which are trying to find their economic footing, or Syria where a civil war prevails.
Both are seeing capital flows coming into their countries in the form of tourism, trade and financial services. These are safe havens of the Middle East. In addition, there continues to be a substantial development spending. In Abu Dhabi's case, $70 billion have been earmarked for the next five years alone.