You are here

Blatter exit sparks Qatar stock selloff on World Cup concern

jopyblatter030615.jpg
Qatar's stocks fell after the resignation of Sepp Blatter as Fifa president Tuesday renewed concern the Gulf nation may lose the right to host soccer's 2022 World Cup.

[DUBAI] Qatar's stocks fell after the resignation of Sepp Blatter as Fifa president Tuesday renewed concern the Gulf nation may lose the right to host soccer's 2022 World Cup.

The QE Index dropped as much as 3.2 per cent, the most since March, as all but one of the index's 20 members declined. Mr Blatter resigned a week after US prosecutors indicted Fifa officials and Swiss authorities started a probe into the awarding of the next two World Cup tournaments.

"At this stage the market is very highly correlated to the news from Fifa," Tariq Qaqish, a fund manager at Al Mal Capital PSC in Dubai, said by telephone.

"There's no real confirmation that a new president means they'll lose the opportunity to host, but the uncertainty creates lots of concern and that means downward pressure on the market."

Qatar is spending about US$200 billion on infrastructure in the run up to hosting the world's most-watched sporting event. The selection stirred controversy because of the country's limited soccer tradition and the extreme temperatures in the June and July period when the tournament is usually held. Mr Blatter's Fifa changed the dates, which will force major leagues in Europe to alter their schedules.

Stocks in Qatar retreated 1.6 per cent at 10:20 am in Doha to 11,990.46. About 321 million Qatari riyals of shares traded, compared with a one-year full-daily average of 657 million riyals. Investment and real estate company Ezdan Holding Group led decliners with a 4.5 per cent slide. Gulf International Services, a holding company, is the only stock that rose today.

Mr Blatter was re-elected to a fifth four-year term as president of Fifa last week but said Tuesday he will call a special congress sometime between December and March to elect his successor.

Swiss prosecutors have opened a probe into the awarding of the 2018 and 2022 tournaments to Russia and Qatar respectively, after a US-led investigation that focused on alleged corruption in earlier decisions over venues.

The iShares MSCI Qatar Capped ETF, an exchange traded-fund incorporated in the US, declined the most since April 17 on Tuesday. Qatar's debt due January 2040 fell on Tuesday, sending its yield up six basis points to 4.28 per cent, the highest since March 18. The bond was little changed on Wednesday.

A spokesman for the Qatari committee in charge of World Cup preparations declined to comment on Mr Blatter's resignation and said it was a separate issue from hosting the tournament.

BLOOMBERG