Qatar considers acquiring major stakes in investment banks in Europe, sources told Al Arabiya, noting that the negotiations are currently underway with seven banks suffering from accumulated financial crises caused by the economic recession in Europe.
Qatari delegations are leading broad negotiations to widen their investment portfolio in Luxembourg, in order to diversify their income generating investments, the sources added.
Basheer al-Kahlout, an economist, told Al Arabiya that widening the investments of Qatar’s investment authority in foreign markets is part of Qatar’s strategy to diversify the sources of income, away from gas and fuel sectors, which contribute 55% of Gross Domestic Product (GDP).
He said that Qatar Holding invested its budget surplus, estimated at $16.5 billion annually (60 billion QAR) in the past two years in foreign lucrative projects, which sets a record for the investments in Europe. He confirmed that the global decline in prices, as a consequence of the financial crisis, offered unique investment opportunities with a high profit in return.
He added that the global economic crisis, which hit the United States and the European Union and other industrialized countries, contributed in creating many investment opportunities that fit with the aspirations of countries aiming at long term investments, such as Qatar’s investments in real estate, foreign companies, manufacturing plants, banks and even fashion houses.
Al-Kahlout said that “Europe suffers from economic recession and aims at attracting foreign investors, and Qatar is one of the countries that can benefit from these opportunities.”
As for the cost of the sovereign bonds issued by Qatar and used in expanding its investments, al-Kahlout explained that the cost is extremely minimal compared to other bonds in the Gulf, which favors the opportunities of borrowing in the actual timeframe.
Qatar invested in the Paris St. Germain soccer and handball club, and became an investor in the French Total Oil group, as well as the British Shell. Qatar invested $5 billion in the Chinese stock market, and bought the building which hosts Le Figaro Magazine in Paris, and 6% of Spanish Iberdrola. It bought Harrods in London for $2.2 billion in 2010, in addition to financing 95% of The Shard tower in London, the highest skyscraper in Europe.
Qatar foreign investment in 2011 reached $6.027 billion, as per U.N. investment conference report for 2012, with an increase of 223.5% in 2010, which was estimated at $1.863 billion.
These investments contributed in transforming this relatively small country, of 1.9 million people, and $104,000 per capital, to an important player at both economic and social arenas, working hard to improve the social responsibility of independent funds towards the recipient countries.
It is likely that these investments will contribute to creating future jobs in recipient countries, along with boasting the well needed reserves of foreign currencies in these countries, in the context of the actual economic crisis.
The International Monetary Fund expected a 6% growth of the Qatari economy in this year, noting that the expected growth in the next four years will be done through non-oil or energy sectors.
Qatar has the world largest reserves of natural gas, and enjoys a leading position among exporters of Liquefied Natural Gas, reaching 77 million tons per year.