Font Size

- Aa +

Mon 27 Oct 2008 10:50 AM

Font Size

- Aa +

Qatar downplays impact of credit crunch

PM says gov't will boost investments at home, will not pull out of global holdings.

Qatar downplayed the impact of the global credit crisis on its investment plans, saying in reports published on Monday 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 massive infrastructure and industry projects as well as snapping up stakes in international assets.

Qatar's Prime Minister downplayed the extent of damage on its economy and the Qatar Investment Authority (QIA), the country's sovereign wealth fund, from the decline in stock markets abroad, Al-Sharq newspaper reported.

"We are looking at a long-term strategy in investment and not a limited or temporary strategy," the newspaper quoted Sheikh Hamad bin Jassim Al-Thani as saying.

QIA is among investors from which Credit Suisse Group was raising 10 billion Swiss francs ($8.64 billion) - or about 12 percent of its outstanding equity.

QIA is also set to boost its investment in British bank Barclays as part of a 2 billion pound rescue package, The Observer reported on Sunday, without citing sources.

The global market turmoil has battered Gulf Arab bourses, until recently largely seen as shielded from international declines, denting investor 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 percent since hitting an all-time high of $147 per barrel.

Earlier this month, Qatar launched a $5.3 billion plan to buy 10 percent to 20 percent of banks' listed capital on the Doha bourse to mitigate the impact of the global financial crisis and boost investor morale.

Sheikh Hamad said in Monday's remarks that 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.

"Qatar will continue its infrastructure and investment projects in spite of the global turmoil in the markets," Gulf Times quoted him as saying.

"We are currently discussing next year's budget and you will see that all infrastructure projects are ongoing. It will speak for itself."

Sheikh Hamad said the recent stock market drop was "unjustified" and urged investors to "keep their shares and be calm".

Qatar's main index has plunged 28 percent this year to Sunday's close, after gaining 34 percent last year.

"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)