Qatar trades thin on credit downgrade

Qatar’s stock market dropped yesterday after Fitch cut the country’s credit rating, while most other Arabian Gulf bourses fell in thin trade but Egypt’s blue-chip index gained strongly, helped by investment firm Qalaa Holdings.

Fitch lowered Qatar by one notch to AA- with a negative outlook on Monday, citing the impact of sanctions imposed by other Arab states on Doha. That brought Fitch into line with Moody’s and Standard & Poor’s.

The downgrade threatens higher funding costs for Qatari banks as they seek to replace deposits and loans that are being withdrawn by the other Arab states. Most bank shares fell yesterday as Qatar National Bank lost 1.3 per cent.

The Qatari index slipped 0.9 per cent to its lowest close since early July. Among other active stocks, Qatar Gas Transport (Nakilat) dropped 2.8 per cent.

Turnover was thin in other Gulf markets as many investors stayed away with the approach of Eid Al Adha holidays; the holidays start in Saudi Arabia on Wednesday and in the UAE on Thursday.

In Dubai, the index edged down 0.1 per cent with daily trading volume hitting its lowest level since September 2015 for a second straight day. GFH Financial, the most active stock, gained 1.7 per cent.

Dana Gas retreated 1.5 per cent in Abu Dhabi, helping pull the index down 0.5 per cent.

Saudi Arabia’s index edged down 0.04 per cent as industrial pipe maker Amiantit jumped 6.5 per cent in unusually heavy trade after saying it expected a capital gain of 50 million to 60m Saudi riyals and positive cash flow of between 2m and 4m riyals in the third quarter due to the merger of its European entities.

Development Works Food surged 4.9 per cent after reporting second-quarter net profit rose by almost twothirds from a year earlier as revenues more than doubled.

In Egypt, the blue-chip index climbed 1.4 per cent as Qalaa, which had jumped 8.9 per cent on Monday after one of its units sold its stake in an Ethiopian company in a deal worth US$14.5m, added a further 3.4 per cent. Investment bank EFG Hermes gained 2.3 per cent and GB Auto surged 8.1 per cent in its heaviest trade for a month. The broad EGX100 index fell 0.3 pe rcent, however.