In the war of words and sanctions between the Arab world and Qatar, it appears that Saudi Arabia, UAE and Egypt are doing better, while Qatar is scrambling to put an end to the bleeding outflow of capital it has seen since then.
Last week, the Qatar Islamic Bank (QIB) said it will boost its deposit base by offering certificates of deposit in Qatari riyals and U.S. dollars, after it was hit by an outflow of money.
While some analysts are praising Qatar as a resilient economy with sufficient deposits in its banks to sustain the ’embargo’ imposed by other members of the GCC, the country failed to stem the capital outflow.
And it is hurting
QIB said on Sunday last week it was offering one- and two-year CDs in its second series of such paper. Its first series was launched in December 2015, according to the Reuters.
Saudi Arabia, the United Arab Emirates and Bahrain cut diplomatic and transport ties with Qatar on June 5, accusing it of supporting terrorism. This prompted some firms and individuals from those states to pull money from Qatari banks.
As a result, deposits in Qatari banks shrank 1.8 percent from the previous month in June. QIB was particularly hard hit, with its customer deposits falling to 96.9 billion riyals ($26.6 billion) at end-June from 103.9 billion riyals at end-March, according to its financial statements.
Saudi Arabia, Egypt outperform in weak region
Saudi Arabia’s stock market edged up on the back of modest gains in the banking sector on Sunday while Egypt imitated world markets’ strong finish at the end of last week. Most other Middle Eastern bourses fell.
Qatar’s index dropped 0.6 percent with 15 of the 20 largest companies falling. Telecommunications operator Ooredoo was the biggest loser, falling 3.0 percent.
The Dubai’s index also fell 0.3 percent, snapping five straight sessions of modest gains.
But in Egypt, private equity firm Qalaa Holdings added 2.7 percent; the stock has risen 10.7 percent in the past four days after a Kenyan court ended the company’s troubled Rift Valley Railways’ concession and ordered that assets and employees be handed over to Kenya Railways, said Reuters.
Most other Egyptian shares were also strong, taking their cue from the positive mood in global equities. The index rose 1.1 percent.
UAE construction contracts: $45 billion
However, the United Arab Emirates or UAE is likely to see a 5 percent uptick in new construction contract awards by the end of this year, according to Faithful + Gould, reported the Zawya.com portal.
The portal said the latest Construction Intelligence Report produced by the firm for the first half of 2017 shows that $22 billion worth of awards were made.
This means it is “in line with expectations” that the total amount due to be awarded this year will be about $45 billion – 4.6 percent higher than the $43 billion awarded last year.
Nevertheless, backlog – the amount of work that companies have in hand – shrunk by $17 billion as major pieces of work completed and were not replaced as quickly.