Stocks in Qatar fell sharply as the 3 July deadline to accept a series of demands by four Arab nations approaches, with investors fearing that further economic sanctions may be initiated if an agreement is not reached.
The Qatari benchmark index recorded an intraday loss of close to 4 per cent early on 2 July, but recovered slightly towards the end of the trade and closed 2.31 per cent lower at 8,822.15. Off the 42 listed companies, 39 ended trade in red, while only two rose and one remained unchanged.
Banking property stocks led the decline. Qatar National Bank (QNB), the biggest lender in the country, slipped1.2 per cent, while Qatar Islamic Bank and Commercial Bank of Qatar declined 5.5 per cent and 4.5 per cent, respectively. Qatar Islamic Insurance and Qatar navigation were the only two companies to record an increase in stock value.
The market, which as a whole has fallen in value by 15.47 per cent since this year, has dropped by about 11 per cent since June 5, when Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic and transport links with Doha, accusing it of destabilising the region through engagement with Iran and support of the Muslim Brotherhood in Egypt as well as the jihadist group Islamic State in Iraq and Syria (Isis).
The four nations have given Qatar time until 3 July to accept their demands in return for a removal of the economic blockade that has been introduced. Qatar has given no indication it is ready to accept the list of demands, which includes shutting down state-owned broadcaster Al-Jazeera, cutting diplomatic ties with Iran and closing a Turkish military base in Qatar.
Qatar has denied these allegations, with officials saying that Doha would not negotiate until the blockade was lifted. Qatar is unwilling to concede any demands that threaten its sovereignty or violate international law, its Foreign Minister Mohammed al-Thani said in Rome on 1 July.
There is no fear from our direction. We are ready to face the consequences, Al-Thani was quoted as saying by news agency Bloomberg. There is an international law that should be respected and not violated.
Qatar is willing to sit down and negotiate under the right circumstances, he added.
The ultimatum and list of demands was handed over to Qatari officials by Kuwait, which is mediating in the dispute. The list was announced after US Secretary of State Rex Tillerson, on 22 June, urged the blockading states to make their demands reasonable and actionable.