Saudi Arabia suffers as both local and foreign investors snub the troubled kingdom in favour of Qatar’s safer economic environment.
A report by Bloomberg has found that foreign stock investors have opted for Qatar over Saudi Arabia in 2018.
Official figures show that overseas institutional investors were net buyers of about US$2.3 billion of shares traded on Doha’s stock market this year, more than triple the foreign flows into Riyadh.
According to telling stock-exchange data, inflows picked up in Qatar during 2018 after several large-cap companies announced they were easing limits on foreign ownership, prompting an adjustment of their weighting in benchmarks used by emerging-market fund managers.
Meanwhile, in Saudi Arabia, overseas investors were net buyers of as much as US$3 billion at a peak in June, but that figure fell to US$700 million after a sell-off following the murder of journalist Jamal Khashoggi.
“Investors see that Qatar is still a stable area for investment,” said Naeem Aslam, the chief market analyst at Think Markets UK in London. “Going into 2019, the trend could very well continue because Saudi Arabia has itself been involved in a number of conflicts around its border and this doesn’t represent stability at all.”
Earlier this week, we revealed how Qatar had pulled out of the Saudi-led OPEC group to manage its own oil and gas sector and to focus on LNG exports. And, according to FocusEconomics, Qatar’s economy is performing far better than Saudi Arabia’s in 2018.
Experts predict that Qatar’s economic growth will be driven by increased oil and gas production, and infrastructure projects related to the 2022 World Cup over the coming years.
FocusEconomics also states that Qatar will see forecast growth of 2.8% in 2019 and 2.7% in 2020, and will outperform economic growth forecasts for Saudi Arabia.