Qatar Shares Fall to 8-Month Low as Oil Drop Dims Growth Outlook

Qatar’s shares fell to the lowest in more than eight months as concern grew that oil prices below $80 a barrel may slow economic growth in the Persian Gulf and regional political tensions mounted.

Industries Qatar QSC (IQCD), the Middle East’s second-biggest petrochemicals company, decreased for a fourth day. Qatar Telecom QSC, the country’s biggest company by revenue, retreated 1.1 percent. Qatar’s QE Index (DSM) fell 0.4 percent to 8,194.65, the lowest since Oct. 5, at the close in Doha. The measure is down 6.7 percent so far this year. The Bloomberg GCC 200 Index (BGCC200) of Gulf Cooperation Council stocks rose 0.2 percent after declining for five days.

Crude oil fell amid concern a meeting of European leaders this week will fail to halt a debt crisis that threatens to slow the economy and curb fuel demand. Oil for August delivery declined as much as 0.6 percent to $78.71 a barrel in New York. Prices have dropped 23 percent this quarter, the biggest retreat since the final three months of 2008. Gulf Arab oil exporters, including the United Arab Emirates and Saudi Arabia (SABIC), supply about a fifth of the world’s oil.

“Oil prices are near the year’s bottom with mostly bearish sentiment, which could put pressure on the government spending programs and hinder already-fragile economic growth,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “Worry over the euro sovereign debt crisis is the main driver behind investors risk-averse sentiment.”

Oil Price Drop

Qatar, the world’s biggest exporter of liquefied natural gas, plans to spend $130 billion on infrastructure by 2019 as it prepares to host the soccer World Cup in 2022, according to forecasts by the country’s development planning office released yesterday.

The agency raised its outlook for economic growth this year while warning that the estimate is vulnerable to a drop in energy prices. Gross domestic product will expand 6.2 percent and will slow to 4.5 percent in 2013, it said.

Persian Gulf shares have also been affected as tensions escalated between Turkey and Syria. Turkey is ready to attack any Syrian military forces that approach its border and are deemed a threat after the shooting down of a Turkish warplane by Syria last week, Prime Minister Recep Tayyip Erdogan said. The North Atlantic Treaty Organization is meeting on the incident today in Brussels.

“Regionally, there is also some fear that the Turkish- Syrian air incident could translate itself into a full confrontation,” Farhat said.

Industries Qatar fell 0.6 percent to 128.3 riyals, the lowest since Jan. 29. Qatar Telecom retreated the most since June 14 to 107.8 riyals. The company after the market close offered to buy the shares it doesn’t already own in National Mobile Telecommunications Co. (NMTC), according to a statement issued by Kuwait’s Capital Markets Authority.

Elsewhere in the region, Oman’s MSM30 Index (MSM30) and Dubai’s DFM General Index (DFMGI) slipped 0.1 percent. Abu Dhabi’s ADX General Index (ADSMI) decreased 0.2 percent, while Kuwait’s measure rose 0.6 percent. Bahrain’s gauge gained 0.4 percent and Saudi Arabia’s Tadawul All Share Index (SASEIDX) advanced 0.2 percent.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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