The resolve to the three-year long Gulf crisis is seen as the “beginning of the openness”, the effects of which will be felt in the medium term, whereby the positive impact will be more on Qatar’s economy, especially on liquidity and connectivity, said a top official of Aventicum Capital, a joint venture between the Qatar Investment Authority and Credit Suisse.
Expecting Islamic banks, logistics and transportation and tourism sectors to be the major beneficiaries in the medium term; Talal F Samhouri, portfolio manager of Aventicum Capital said Qatar’s private sector will also evaluate the benefits of re-establishing their business links.
“The biggest beneficiary and perhaps the fastest will be Islamic banks because traditionally they used to draw lot of interests in deposits from Saudi Arabia and other Gulf countries because of the higher interest rate regime in Qatar,” he said, adding such funds from the regional markets would lower the cost of funds and therefore will be positive for them in terms of both topline and bottom line.
Overall the economies of both the country would stand to benefit but the positive impact would be more on Doha’s in terms of liquidity, according to Samhouri.
Terming the opening of border as “the beginning to openness to other countries” in the neighbourhood; he said the effect of it would be felt only in the medium term because of the time taken in establishing the commercial contacts.
Doha would also benefit more from the connectivity as more travellers from Saudi Arabia would come, Samhouri said, highlighting that annually 1bn-1.5bn people from Saudi used to visit Qatar before blockade.
In this regard, the move would be positive, specifically for Qatar Airways and generally for the tourism, hotel and real estate sectors.
On Qatar Airways, he said the lifting of airspace blockade will result in fuel and cost savings for the national carrier in the medium term, which would reflect in their pricing structure.
Krisjanis Krustins, director (Sovereign Ratings), Fitch Ratings, is of the view that a resumption of travel links will eventually lift tourism inflows, and greater interest from regional buyers could support the real estate market, which has been in a multi-year downturn.
The normalisation of relations between Qatar and its neighbours, signalled by the reopening of borders with Saudi Arabia, will help Qatar’s non-oil economy, according to him.
Companies from Saudi Arabia and other Gulf countries would now have to compete with what Doha has built in, especially after the blockade, which had strengthened its self-sufficiency measures, Samhouri said, hinting that their pricing would have to be on competitive terms.