Qatari companies are mostly set to benefit from the resolution
Qatar’s stock prices rose by 1.5% on Sunday to close at its highest level since January 2020, amid talks between Gulf Cooperation Council [GCC] member states to bring an end to the three-year crisis.
When the move to blockade Qatar was first announced in 2017, the country’s stock exchange prices slumped by 18%, it’s biggest annual decline since the global financial crisis in 2008.The Qatar Stock Exchange has also under performed Saudi Arabia’s Tadawul index since the crisis erupted in June 2017.
“With the rift looking to be ending soon, the biggest beneficiary should be Qatar Stock Exchange,” said Talal Samhouri, senior portfolio manager at Doha-based Aventicum Capital Management Qatar LLC.
Shares in Qatar trade at cheaper valuations than those in Riyadh, making them more appealing, he said.
As talks continue, Qatar’s shariah-compliant banks Qatar International Islamic Bank and Masraf Al Rayan bank have seen 2.4% and 0.5% increase in price as they could potentially benefit from new Saudi-based customers.
On the other hand, Qatar-based Baladna’s prices fell by 1% as the company could face competition from Saudi Arabia’s Almarai, which is about 15 times bigger than Baladna.
During the month of November, the stock market witnessed a great boost due to several good news across global and local markets. By the second week of the month, the QE Index saw a surge of 320 points buoyed by the outcome of the US presidential elections.
Over the past few days, messages coming from several officials in the GCC have been extremely positive regarding the announcement of what’s been described as an “historic” breakthrough in the three year-long dispute; with foreign ministers from Qatar, Kuwait and Saudi Arabia all welcoming the latest developments.
The recent breakthrough is seen as an outcome of Senior White House advisor and US President Donald Trump’s son in-law Jared Kushner’s recent visits to Qatar and Saudi Arabia.
According to some reports, the initial stages of the deal will see Saudi Arabia giving permission to Qatari planes to use its airspace, and the reopening of the land border between the two countries.
The Gulf crisis erupted in 2017, when Saudi Arabia, UAE, Bahrain and Egypt severed ties with Qatar, ordering an illegal land, air and sea blockade.