Kuwaiti banks to stay invested in Qatar
RIFT RAISES DOUBT ON SUSTAINABILITY OF GCC
QATAR STOCKS FALL
Kuwaiti institutions confident of financial solvency
DUBAI, July 2, (Agencies): Kuwaiti banks have no intention of withdrawing their deposits and investments from Qatar, a Kuwaiti official source told Reuters on Sunday.
The source, speaking on condition of unanimity because of political sensitivities, noted that Kuwaiti banks had not announced plans to withdraw deposits or take other exceptional measures when detailing their exposure to Qatar in bourse statements over the last few days.
“This reflects the confidence of Kuwaiti banks and Kuwaiti companies in the financial solvency of the state of Qatar, the Qatari banks and financial institutions and their ability to meet their obligations,” the source said.
“This confidence is confirmed by the international rating institutions. These investments are generating good returns for Kuwaiti banks. There is no reason to worry about them at the moment.”
Among the statements by Kuwaiti banks, Burgan Bank, for example, said its total exposure to Qatar was 66.7 million dinars ($220 million), or 0.9 percent of the bank’s total assets.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar on June 5, accusing it of supporting terrorism. A deadline for Doha to comply with their demands was expected to expire late on Sunday with no sign of the crisis ending.
The four Arab states have warned they may impose further sanctions against Qatar. They did not give details but bankers believe, for example, that governments may ask their banks to pull deposits from Qatar.
Kuwait has not sided with the coalition against Qatar and has instead tried to mediate between the two sides.
Fresh sanctions eyed
Qatar faces possible further sanctions by Arab states that have severed ties with Doha over allegations of links to terrorism, as a deadline to accept their demands is expected to expire on Sunday night.
Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said the demands were made to be rejected, adding that the Arab ultimatum was aimed not at tackling terrorism but at curtailing his country’s sovereignty.
But he told reporters in Rome that Doha remained ready to sit down and discuss the grievances raised by its Arab neighbours.
“This list of demands is made to be rejected. It’s not meant to be accepted or ... to be negotiated,” Sheikh Mohammed said.
“The state of Qatar instead of rejecting it as a principle, we are willing to engage in (dialogue), providing the proper conditions for further dialogue.”
He added that no one had the right to issue an ultimatum to a sovereign country.
The feud erupted last month when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and travel ties with Qatar, accusing it of supporting terrorism and being an ally of regional foe Iran, charges that Doha denies.
The countries have threatened further sanctions against Qatar if it does not comply with their list of 13 demands presented to Doha by Kuwaiti mediators 10 days ago.
The demands include closing a Turkish military base in Qatar and shutting the Al Jazeera pan-Arab television network, which Doha also rejected.
Qatar’s Gulf critics accuse Al Jazeera of being a platform for extremists and an agent of interference in their affairs. The network has rejected the accusations and said it will maintain its editorial independence.
Gulf countries have insisted the demands were non- negotiable.
The UAE ambassador to Russia has said Qatar could face fresh sanctions if it does not comply with the demands.
Gulf states could ask their trading partners to choose between working with them or with Doha, he said in a newspaper interview last week.
They have not specified what further sanctions they could impose on
Doha but commercial bankers in the region believe that Saudi, Emirati and Bahraini banks might receive official guidance to pull deposits and interbank loans from Qatar.
A more serious sanction would be to ban investors from holding Qatari assets, but authorities have given no sign of doing this.
UAE minister of state for foreign affairs Anwar Gargash played down the chances of an escalation, saying “the alternative is not escalation but parting ways”, suggesting Qatar may be forced out of the six-member Gulf Cooperation Council (GCC).
The Western-backed body was formed in 1981 in the wake of Iran’s Islamic Revolution and the outbreak of the Iran-Iraq war, by Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.
Speaking in Washington last week, the Qatari foreign minister said the GCC was set up to guard against external threats.
Doubts on GCC sustainability
“When the threat is coming from inside the GCC, there is a suspicion about the sustainability of the organization,” Sheikh Mohammed told reporters.
Qataris appeared defiant on Sunday, with newspapers decrying a “siege” and sharing on social media a cartoon of David and Goliath to illustrate Qatar’s struggle with its larger neighbours.
A Qatari artist whose portrait of Qatar’s Amir has been draped from skyscrapers and affixed to car windows across the capital signed t-shirts for Qataris at a museum on Saturday.
“As you see the photo is now all over, it’s a sign of loyalty to the Amir and love for the country,” he said.
Saudi Arabia’s permanent representative to the United Nations, Abdullah bin Yahiya al-Moallemi, said on Twitter that Qatar had failed to take opportunities offered by its neighbours in the past to stop supporting terrorism.
“Qatar had insisted on shaking the security of the kingdom of Saudi Arabia and interfering in the affairs of countries in the region,” Moallemi said.
The crisis has hit travel, food imports and ratcheted up tensions in the Gulf and sown confusion among businesses, while pushing Qatar closer to Iran and Turkey.
But it has not hit energy exports from Qatar, the world’s biggest exporter of liquefied natural gas and home to the region’s biggest US military base.
The rift opened days after US President Donald Trump met Arab leaders in Riyadh and called for unity against regional threats such as Iran and hardline Islamist militant groups.
Qatar stocks fall
Qatar’s stock exchange dropped Sunday following an extended holiday closure as the tiny Gulf nation faced a deadline to accept demands from four Arab countries in part over what they allege is its support for extremist groups.
Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut off ties with 2022 World Cup host Qatar in early June, restricting access to their airspace and ports and sealing Qatar’s only land border, which it shares with Saudi Arabia. They issued a 13-point list of demands to end the standoff June 22 and gave the natural gas-rich country 10 days to comply.
Qatar’s main QE stock index lost more than 3 percent when it reopened for the first time since the demands were issued because of the Eid al-Fitr holiday break. It eventually recovered some of its losses later in the trading session to close down 2.3 percent at 8,822.15.
The deadline is expected to expire at some point Sunday, though the countries involved have not provided a precise time or detailed what immediate penalties, if any, Qatar will face. Qatar has repeatedly denied charges it supports extremism and says the demands are an affront to its sovereignty.
Its foreign minister, Sheikh Mohammed bin Abdulrahman Al Thani, showed no signs of giving in during a press briefing in Rome on Saturday, saying they were never meant to be accepted and that his country “is prepared to face whatever consequences.” Qatar’s government offered no additional comment Sunday.
While in Rome, Al Thani met with Italian Foreign Minister Angelino Alfano, who gave his backing to ongoing mediation efforts led by Kuwait. US Secretary of State Rex Tillerson has also tried to resolve the dispute, with the US last week urging Saudi Arabia and its allies to stay “open to negotiation” with Qatar.
Russian President Vladimir Putin has separately spoken with the leaders of Qatar and Bahrain, urging direct dialogue among all the states involved, according to statements released by the Kremlin on Saturday.