Qatar’s stock market may remain jittery over World Cup
Qatar's stock market may remain vulnerable after a FIFA official claims Doha may be stripped of 2022 World Cup
Qatar’s stock market may remain volatile and vulnerable to further sentiment-driven selling pressure after a senior FIFA official said Doha could be stripped of World Cup hosting rights if evidence emerges of bribery in the bidding process.
The FBI’s investigation of bribery and corruption at FIFA includes scrutiny of how soccer’s governing body awarded World Cup hosting rights to Russia and Qatar, a U.S. law enforcement official told Reuters this week.
Domenico Scala, the independent chairman of FIFA’s audit and compliance committee, told a Swiss newspaper on Sunday that no evidence of vote-buying had been brought fourth yet, but if it surfaces, Russia and Qatar’s winning bids for the 2018 and 2022 tournaments, respectively, would be invalidated.
Investors in the Gulf state have reacted nervously to all announcements since the initial arrests of several FIFA officials and the launch of criminal probes against them.
Although most of government spending is likely to continue with or without the cup, losing it will be a blow to Qatar’s reputation and the sentiment of local retail investors.
It could also affect neighboring markets, such as logistics and tourism hub Dubai, which may otherwise benefit from the World Cup being held nearby.
In other negative news for the region, oil prices have fallen in Asian trade as China’s oil imports dropped sharply and markets were expected to be increasingly oversupplied following OPEC’s decision to keep its production targets unchanged.
Asian shares extended losses on Monday, while the dollar was higher after upbeat U.S. employment data raised bets that the U.S. central bank would raise interest rates as early as September.