The gradual and partial removal of sanctions could imply c.US$200bn in annual import demand by 2020, from US$80bn now. UAE and Turkey are best positioned to enjoy potential upside in Iranian trade volumes. The Deal should also support South Caucasus via freer trade, but could have some negative spill-over effects on Russia via lower oil prices or eventual competition to supply gas to Europe. Still, sustaining any boost in activity would require Iranian macro reforms.
From equity perspective, Emaar could be a key beneficiary from greater Iranian property demand in Dubai. The Deal could be positive also for refiners. Transport and MENA banks are sectors that have medium- to long-term potential upside. Dubai, Armenia and Turkey would benefit the most, although political considerations constrain the latter two.
