Qatar downplays crisis impact, will continue to invest

Qatar downplayed the impact of the global credit crisis on its investment plans, saying in media reports that it would continue to boost investments at home and would not pull out of depressed global holdings. Qatar, the world’s biggest exporter of liquefied natural gas, has been investing windfall oil revenues in infrastructure and industry and snapping up stakes in international companies. Qatar Investment Authority (QIA), the country’s sovereign wealth fund, is among investors from which Credit Suisse Group was raising 10 billion Swiss francs (Dh31.7bn) – or about 12 per cent of its outstanding equity. Qatar is also set to boost its investment in British bank Barclays as part of a £2bn (Dh11.3bn) rescue package. Qatar’s prime minister downplayed the extent of damage from declining overseas stock markets on its economy and QIA, the Al Sharq newspaper reported. « We are looking at a long-term strategy in investment and not a limited or temporary strategy, » Sheikh Hamad bin Jassim Al Thani said. The global market turmoil has also battered Gulf Arab bourses, until recently largely seen as shielded from global declines, denting confidence and prompting Gulf governments to intervene. With the recent slide in oil prices, worries mounted that the financial crisis could cause a slowdown in the region’s economic growth. Oil has slumped more than 50 per cent since hitting an all-time high of $147 per barrel. Earlier this month, Qatar launched a $5.3bn plan to buy 10 per cent to 20 per cent of banks’ listed capital on the Doha bourse to mitigate the impact of the global financial crisis and boost investor morale. Sheikh Hamad said the Gulf state would push ahead with investment plans despite global economic turmoil and urged stock market investors to remain calm. « Qatar will not stop or slow down its various projects due to the global crisis, » Sheikh Hamad said, according to The Peninsula. Sheikh Hamad’s comments came as the country’s largest company by market value, Industries Qatar, halted steel exports due to a 45 per cent increase in local demand fuelled by an « unprecedented » construction boom. « The increased demand on the local market reflects the strength of the national economy and the dynamism of the construction sector, » Qatar Steel said yesterday. Qatar’s economy expanded at a great pace in the second quarter spurred by high energy prices, while the construction sector grew 19.8 per cent. The economy is set to grow 11.6 per cent in real terms this year, the fastest pace in the oil-exporting region, according to a Reuters poll in July. Sheikh Hamad said the stock market drop was « unjustified ». « All the listed companies have achieved huge profits which even exceeded those of last year… The downturn is due to psychological factors only, » he said. Reuters