Foreign investors 'favour Qatar over Saudi Arabia' despite blockade

Qatar saw three times as much foreign stock investment in 2018 compared to Saudi Arabia, with Riyadh's involvement in Yemen's conflict and the murder of Saudi journalist Jamal Khashoggi provoking uncertainty.

Overseas investors were net buyers of over $3 billion in Saudi Arabia at a peak in June, Bloomberg reported on Wednesday, but that figure plummeted to $700 million following the brutal murder of Khashoggi as investors dumped Saudi stocks.

Saudi stock investment could pick up next year as Riyadh joins emerging-market gauges compiled by FTSE Russell and MSCI Inc., but geopolitics is having a detrimental effect on Riyadh's trading, the report said.

"Investors see that Qatar is still a stable area for investment," Naeem Aslam, the chief market analyst at Think Markets UK in London, told Bloomberg.

"Going into 2019, the trend could very well continue because Saudi Arabia has itself been involved in a number of conflicts around its border and this doesn't represent stability at all."

Inflows increased in Qatar this year after several companies announced they were easing limits on foreign ownership, Bloomberg reported.

Last month, the IMF said Qatar's economy has continued to grow despite a blockade on it by neighbouring Gulf countries - and could experience a three percent growth rate next year.

This will steady to an annual GDP growth of around 2.7 per cent from 2020 until 2023. 

Gas exports, the continued expansion of Qatar's infrastructure, and the hosting of the World Cup 2022 will all contribute to the growth rates, the IMF report said.

Saudi Arabia, Bahrain, the UAE - along with Egypt - launched a surprise blockade on Qatar in June 2017, accusing Doha of moving closer to Iran and supporting extremist groups in the region.

Doha denies the charges, and has said the Saudi-led blockade was aimed at making Qatar a vassal state.