Posted on August 18, 2017

Qatar's sovereign wealth fund, with around $300 bn to its name, is shrugging off the country's diplomatic crisis with its neighbours and planning to expand its holdings.

Its chief executive was quoted as saying there were no plans to liquidate foreign assets -- as some investors had speculated -- and that the fund would soon announce big new international investments. "We have just completed a tour of several countries around the world and you will hear about significant investments soon," Sheikh Abdullah bin Mohamed bin Saud al-Thani, who runs the Qatar Investment Authority (QIA), told the Lusail newspaper. Qatar's economy has never been under pressure since June 5 when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Doha, accusing it of backing terrorism, a charge which Doha denies.

Though some banks from the blockading countries pulled out deposits and loans from Qatar, the Qatar Investment Authority (QIA) deposited billions of dollars in local banks to prevent them from suffering funding squeezes. Official data shows Qatar deposited $10.9 bn in its banks during June. Although the QIA is believed to have substantial cash reserves, economists have speculated it may soon have to start liquidating some of its overseas assets -- such as holdings or bonds or equities, or even real estate -- in order to continue supporting the economy. However, Sheikh Abdullah said that the sanctions against Qatar had not affected the QIA's investment strategy. He did not give any details of the planned new investments.

His comments were in line with observations by a private banker familiar with the QIA's operations, who told Reuters that he had not noticed any major asset sales by the fund in the past two months. AFP adds: Qatar's economy is strong enough to survive the siege imposed by neighbouring countries, analysts say. The heavily air-conditioned malls of Doha, a city in the throes of a $200-plus bn construction boom as it aims to make a splash on the world stage by hosting football's 2022 World Cup, remain busy as ever, as do its roads. To counter the sanctions and trading curbs, Turkey and neighbouring Iran have been sending in food supplies by air and sea.

Rashid bin Ali al-Mansoori, CEO of the Qatar Stock Exchange, said "the Qatar economy is very strong, it's the strongest economy in the region... investor trust and confidence in the market is still there". Analysts said they have faith in the capacity of Qatar, holder of the world's third-largest natural gas reserves after giants Russia and Iran, to withstand a long crisis. "Qatar is the most resilient country in the Middle East by far," said Andreas Krieg, a strategic risk analyst and assistant professor at King's College London university.

source: Gulf Times

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