The UAE and Qatar have been upgraded to emerging markets status by equity index provider MSCI, which could lead to up to $800m flowing into the Gulf states’ capital markets.
MSCI’s market assessments are followed by investors with approximately $7 trillion worth of assets.
UAE and Qatar markets surged in early trade on Wednesday following the upgrade.
Dubai's index rose 2.3 percent to 2,441 points, extending its 2013 gains to 45.3 percent. Dubai Financial Market , the Gulf's only listed bourse, climbed 5.2 percent, while Emaar Properties gained 3.7 percent.
Abu Dhabi's measure climbed 2.8 percent to 3,664 points, up 36.5 percent year-to-date. First Gulf Bank advanced 6.9 percent.
Qatar's bourse jumped to its highest level since September 2008 after rising 1.8 percent to 9,523 points, up 14 percent in 2013.
At the same time MSCI downgraded Greece to emerging market status from a developed one and Morocco to a frontier market.
MSCI said that the reclassifications of the UAE and Qatari markets will coincide with its May 2014 semiannual index review, with the Morocco and Greece downgrades taking place in November this year.
In a report last month, HSBC said that the upgrade for both Gulf markets would come on the back of improved delivery-versus-payment systems and a new buyer-cash-compensation process.
It said that it could see $430m of new investment flow into Qatar, and $370m into the UAE.