DUBAI: Shares of DP World have jumped 9 percent to $23.66 since April 2, valuing the company at about $20 billion.
“You’ll be able to see maybe a pickup in trade with Iran by the end of the year” if sanctions are suspended, he said.
A spokesman for DP World said Jebel Ali is well-positioned to benefit once sanctions end.
The wooden dhows piled with tires, air conditioners, cooking oil and clothing were preparing to sail for Iran from a Dubai wharf, the cargoes testament to a centuries-old trade that survived years of sanctions.
As they secured their loads, the ships’ crews were upbeat as last week’s accord over the Islamic Republic’s nuclear program brought the lifting of sanctions and the return to unfettered commerce one step closer. Few places are better located to benefit than the United Arab Emirates, Iran’s second-biggest trading partner after China since 2009, data compiled by Bloomberg show.
Investors signaled their enthusiasm on the first day of trading after the April 2 pact. Dubai’s benchmark stock index surged the most in two months on bets that the UAE trade hub is set to increase its role as a the main channel for business in and out of Iran.
“Iran is a rich country,” said Sultan Yusuf, a dhow captain who has spent a quarter century ferrying goods across the Persian Gulf to the ports along Iran’s southern coast, conducting his business in Arabic and Farsi. “But if there are economic sanctions, it can’t advance.”
Dubai, home to the world’s second-largest Iranian diaspora community, was at the forefront of both legal and illegal trade with Iran as world powers tightened the noose on its economy over concerns it might develop nuclear weapons. The emirate’s transformation into the Middle East’s banking, trade and transport hub will give it an edge over competitors if a final nuclear deal is sealed and sanctions peeled away.
Banks including HSBC Holdings and Citigroup Inc. set up their regional headquarters in the city, while Jebel Ali Port, operated by DP World Ltd., is the biggest in the region.
Iran might be stuck for a while. Sanctions will only be eased once its compliance with any permanent accord has been attested by international monitors.
The expected gradual opening of country’s markets to foreign investors mean “equity plays on Iran will be more appealing than direct investors,” Cairo-based investment bank EFG-Hermes said April 5. Dubai’s major ports, such as Jebel Ali, have infrastructure “ready to feed into the Iranian market,” said Simon Kitchen, a strategist at EFG-Hermes.
Iranians have traded with the Arabian peninsula for centuries and almost half a million now live in the UAE, building prominent business families, according to a 2011 report by Karim Sadjadpour, a senior associate at the Carnegie Endowment for International Peace.
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