Markets in the Middle East took a hit following announcements from Bahrain, Egypt, Libya, Saudi Arabia, UAE and Yemen that they had severed ties with Qatar over its alleged ties to “extremist” groups.
Qatar’s QE Index became the world’s worst performing and hardest hit Middle Eastern exchange on Monday as a result of the break in diplomatic ties when it lost 7.27 per cent of its value at press time.
The UAE’s DFM Index dropped 0.727 per cent while Bahrain’s BB All Share Index dropped 0.44 per cent.
Saudi Arabia’s Tadawul, however, gained 0.54 per cent as Kuwait’s weighted Index dropped 0.79 per cent.
Middle East stocks are also likely to feel the weight of the flight ban which was imposed on commercial carriers over Qatar. Many flights between Saudi Arabia, UAE, Egypt and Yemen were cancelled indefinitely Monday; Egypt banned Qatar Airways overpass through Egyptian air space.
Although the six Arab countries cited Qatar’s alleged links to terrorist networks for the diplomatic severance, each did so for different reasons.
The Saudi-backed Yemeni government said it decided to cut ties with Qatar because the latter had links with “groups” which backed the Shia Houthi rebels. Experts say the term “groups” refers to Iran’s backing of the Houthi rebels.
For its part, Egypt has long accused Qatar of supporting the outlawed and banned Muslim Brotherhood group, which it claims are behind many terrorist attacks in the country.
The UAE has also accused Qatar of backing the Muslim Brotherhood, which it classified as a security threat. In February 2014, fiery Islamic cleric Yusuf Al Qaradawi, a staple of Al Jazeera’s Arabic programming, launched a verbal attack on the United Arab Emirates for supporting the Egyptian government following the ouster of Muslim Brotherhood president Mohamed Morsi.
The UAE called on Qatar to exile the cleric, but Doha refused.
In the same years, perhaps as a harbinger of things to come, Saudi Arabia, the UAE and Bahrain withdrew their ambassadors from Doha after Qatar failed to honor a joint security agreement in November 2013 that included commitments to cease support for the Muslim Brotherhood and its hosting of Gulf opposition figures.
Meanwhile, Iranian officials have criticized the Arab move saying it was counterproductive to regional stability.
The BRICS Post with inputs from Agencies