Dubai's markets have proven resilient to unrest in parts of the Middle East and North Africa (Mena) region and are poised to capitalise on increased investment from emerging markets, say business leaders.
Turmoil has left markets reeling for much of the year so far. But Dubai's markets have made substantial gains since the start of last month, climbing to the level they held before Egypt's revolution, and many investors now see the emirate's markets as primed for an upward trajectory.
"It's possible we're entering another up phase," said Dr Mark Mobius, the executive chairman of Templeton Emerging Markets Group. "I'm not saying the ride is going to be smooth. It's going to be a bumpy ride in many places, but the trends are very positive."
The unrest that has gripped neighbouring countries in recent months would ultimately assist the emirate's economy and stocks, he added.
"I think you're going to see the acceleration of movement of people and money in the region that's going to be very beneficial to Dubai," Mr Mobius said.
Speaking at a forum in Dubai, Simon Cooper, the deputy chairman and chief executive of HSBC Middle East, said the region's markets would quickly rebound from the losses seen earlier in the quarter.
"This is a delay, not a halt," Mr Cooper said. "The Gulf and the wider Mena region are now too intertwined with the global economy to be excluded for any length of time."
Unrest in parts of the region had caused a number of planned deals to stall in the short term, he said.
"Capital market transactions, such as bond issues and IPOs [initial public offerings], have been delayed," Mr Cooper said. "Inward foreign direct investment decisions have been delayed. Intra-regional M&A [mergers and acquisitions] is being held up."
But increased trade between the UAE and emerging markets, particularly in the energy sector, would help anchor investment in the country as the focus of the world economy shifts eastwards, Mr Cooper said.
"Dubai, the UAE, and the Gulf are at the centre of this trend, geographically, culturally and historically," he said.
The UAE and other Gulf nations would find reciprocal opportunities in emerging markets, particularly as burgeoning Asian economies try to meet their energy needs, he added.
"The Middle East is metamorphosing from being a commodity depot, from where fast-growing Asian economies collect the energy required to power their growth in a simple cash transaction, into a new relationship, a strategic investment partnership in world growth."
The Dubai Financial Market (DFM) General Index has risen 21.9 per cent to 1,648.44 since the market's low on March 3, and volumes have also increased.
Yesterday's trading on the Dubai market was worth Dh369 million (US$100.4m), the third time it has broken the Dh300m barrier this month.
"Although markets sold off, that was because the fear gauge was raised," said Tudor Allin-Khan, the chief economist at Alembic HC Securities. "As the good news came in people started buying back into the market."
Traders were also drawing optimism from positive earnings expectations for the first quarter, said Marwan Shurrab, the chief trader at Gulfmena Alternative Investments.
Many traders shared a growing optimism that the UAE and Qatar would be included in MSCI's emerging markets index for the first time. A decision is due in June.
"[International events] might affect the performance of equity markets, but nevertheless we're having our own catalysts moving the markets," Mr Shurrab said.