Skip to main content
Part of complete coverage on

Dubai tops the world's best performing stock markets as UAE and Qatar lift off as emerging economies

From John Defterios, CNN
updated 2:47 AM EDT, Fri June 6, 2014
STORY HIGHLIGHTS
  • Dubai stock market is best performing in world over last 18 months
  • UAE and Qatar upgraded to emerging market status by MSCI
  • Nine companies from UAE to be represented on MSCI Index

Watch Marketplace Middle East every week on CNN International. Click here for the show times.

Dubai, UAE (CNN) -- Call it a perfect market storm of wealth creation.

Since the start of 2013, the Dubai stock market has registered a near 200% gain to become the best performing financial market in the world.

The Gulf emirate's securing of the World Expo in 2020 is likely one factor behind this success as is the wider UAE's reputation as a safe-haven in a region riddled with uncertainty.

Oil averaging more than $100 a barrel for three years running, meanwhile, is driving growth towards record spending on infrastructure.

The business of comic books

The UAE has "a strong balance sheet" and lot of "promising prospects," said Alia Moubayed, research director at Barclays when asked about the reasons behind investor bullishness over the last 18 months.

Doha opens giant $15 billion airport
Qatar Airways' big move
Egypt prepares for new elections
Tony Blair on radical Islam

Some even believe there's more to come before the Dubai Index tops out.

"The Dow Jones exceeded 165,000 points," said veteran Dubai trader Zakaria Al-Assar. "Still, Dubai (is at) 5,000, we are looking for more, inshallah."

These strong expectations have led to an upgrade for the UAE from the riskier investor category of frontier market to emerging market by financial index firm, MSCI.

Alongside neighboring Qatar, which was also upgraded this week, the UAE is now considered by MSCI to have the same investment status as the likes of China and Brazil.

This change while likely increase investor confidence in the region leading to an increased flow of investment dollars into the Persian Gulf states.

"You will get a level of comfort as an EM (emerging market) fund manager when you are upgraded to this level," said head of equities at NBAD Asset Management, Saleem Khokhar.

"On top of that you will see more and more institutions beginning to play in this space so yes it is a game changer but don't bring it into a short time frame."

Read: Is Middle East new global aviation hub?

Achieving emerging market status has been a long journey for both Qatar and the UAE.

The UAE has been knocking on the door since 2009. But some fund managers suggest this delay actually helped the country's markets and companies mature.

Nine companies will represent the UAE in the MSCI index, including property groups Aldar, Arabtec and Emaar. The gigantic port company DP World and the Dubai Financial Market itself will also feature.

Yet with recognition comes attention and volatility.

The trading floors in Dubai, Abu Dhabi and Doha may be quaint, with limited trading sessions, but they are active.

On the day CNN visited the Dubai exchange, banking stocks were trading up 15% after a wild correction earlier in the month.

"You have to remember just a couple of weeks ago we went through quite a correction and a number of blue chip stocks we were looking at came down between 20-30%," said Khokhar.

After being overlooked for many years, these markets are just coming into focus for many international investors.

Expect more bumps, shocks and opportunities along the way.

Read: The Middle East's king of hotels

Read: Gulf looks to rival Paris fashions

Read: Gas fields could unite Cyprus

ADVERTISEMENT
Part of complete coverage on
Marketplace Middle East
updated 10:33 AM EDT, Fri July 18, 2014
Iran has seen a doubling of tourists visiting the country in the last year and hoteliers are rushing to accommodate them.
updated 10:41 PM EDT, Mon July 14, 2014
In a tiny car repair shop in the Jordanian capital of Amman, one can encounter the latest efforts to solve the country's sky high youth unemployment rate.
updated 9:12 AM EDT, Mon July 14, 2014
Youth unemployment is not a new subject to make the headlines (see Spain and Greece) but it is has become a particularly acute problem for Jordan.
updated 10:59 PM EDT, Thu July 3, 2014
Bales of tomatoes grown near Mafraq, Jordan.
The war in Syria has wide ranging affects on people in neighboring countries, including farmers in Jordan.
updated 8:13 AM EDT, Thu July 3, 2014
Cranes rise above the Aqaba Container Terminal in Jordan.
In the port city of Aqaba, southern Jordan, construction works are popping up everywhere.
updated 1:33 PM EDT, Mon June 23, 2014
Can Turkish Airlines continue to soar in the face of competition from Qatar and the UAE?
updated 11:34 PM EDT, Wed June 11, 2014
A guide to the Middle East's oil and gas reserves.
updated 2:47 AM EDT, Fri June 6, 2014
An Emirati man follows the market activity at the Dubai stock market.
Call it a perfect market storm of wealth creation, but Dubai has come tops with its financial market.
updated 10:48 PM EDT, Thu May 29, 2014
The Middle East's latest airport destination began full operations earlier this week.
updated 11:59 PM EDT, Thu May 22, 2014
Supporters of Egyptian leftist presidential candidate Hamdeen Sabbahi (portrait) attend a campaign meeting in Cairo.
Since the 2011 revolution, Egyptians have seen seemingly endless political crisis, but little economic improvement.
updated 9:55 PM EDT, Sun May 18, 2014
Trade between the UAE and India was $180 million in 1970. Today, this figure is closer to $75 billion.
updated 10:55 PM EDT, Mon May 12, 2014
International Monetary Fund Middle East and Central Asia department director, Masood Ahmed.
Last week, the International Monetary Fund (IMF) released its latest "Middle East and North Africa Economic Outlook" report.
ADVERTISEMENT