On Sunday, we brought you the latest from Qatar, where the sheikdom’s spat with Saudi Arabia worsened over the weekend after Doha and Riyadh couldn’t agree on whose idea it was for Sheikh Tamim to talk to Mohammed bin Salman on the phone. And yes, that’s just as absurd as it sounds.
Well needless to say, it doesn’t bode well for the prospects of a near-term resolution when a question about who picked up the phone and reached out to who ends up being an argument.
The uncertainty around the three-month-old diplomatic row is weighing heavily on Qatari shares and on Tuesday, Qatar’s QE Index came under heavy pressure, falling more than 1.5% at one point to the lowest since April 2013.
Although it rebounded a bit into the close, it’s worth glancing at this chart:
That isn’t great.
And as S&P’s Mohamed Damak and Nashwa Saleh wrote in a report affirming the ratings on Qatar National Bank, The Commercial Bank, Doha Bank, and Qatar Islamic Bank, all with negative outlook and released after the close on Monday, the outlook for Qatar includes “the potential for deterioration of Qatari banks’ financial profiles amid weaker economic growth and external funding outflows.”
Although Doha has put on a brave face, the strain is starting to show. Speaking at a Human Rights Council session in Geneva on Monday, Qatar’s foreign minister Sheikh Mohammed bin Abdulrahman Al Thani urged the UN to take action:
These Gulf countries have taken illegal measures that constitute a grave violation of civil, economic and social human rights, including banning Qatari citizens traveling or transiting through their territories. This has torn apart many families and has interrupted education and the right to work in Qatar.
Remember: all of this so Saudi Arabia can deflect blame for Riyadh’s support of Sunni extremism and punish Doha for adopting a more conciliatory stance toward Tehran.