Qatar falls after Fitch downgrade, Qalaa helps Egypt

Dubai : Qatar’s stock market dropped yesterday after Fitch cut the country’s credit rating, while most other 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-minus with a negative outlook on Monday, citing the impact of sanctions imposed by other Arab states on Doha. That brought Fitch into line with the other two major rating agencies, 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The downgrade threatens higher funding costs for Qatari banks as they seek to replace deposits and loans that are being withdrawn by the other Arab states.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 on Tuesday as Qatar National Bank lost 1.3 per cent.

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

Turnover was thin in other Gulf markets as many investors stayed away with the approach of Eid al-Adha holidays beginning this week; the holidays start in Saudi Arabia on Wednesday and in the United Arab Emirates on Thursday.

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

Dana Gas retreated 1.5pc in Abu Dhabi, helping pull the index there down 0.5pc.

Saudi Arabia’s index edged down 0.04pc as industrial pipe maker Amiantit jumped 6.5pc in unusually heavy trade after saying it expected a capital gain of 50-60 million riyals ($13.3-16.0 million) and positive cash flow of between 2 and 4 million riyals in the third quarter due to the merger of its European entities.

In Egypt, the blue-chip index climbed 1.4pc as Qalaa, which had jumped 8.9pc on Monday after one of its units sold its stake in an Ethiopian company in a deal worth $14.5 million, added a further 3.4pc; it was the most active stock.