Iran’s threat to fast-growing Qatar

Qatar is one of the fastest growing economies in the world, and the country’s gross domestic product (GDP) rocketed up by 28% in 2011. But growing tensions in Iran and the potential closure of the Strait of Hormuz could endanger one the of nation’s main money makers – gas exports.

David von Simson, chairman of the Qatar Investment Fund, tells Citywire how the economy could navigate its way through such a geopolitical minefield and how the Arab Spring has brought about positive transformations for the region.

The trust is heavily invested in banks, with four of its top five holdings or more than 50% of the portfolio, in financials. Simson says the ‘broad brush’ attitude we hold towards banks following the 2008 financial crisis doesn’t necessarily translate to the banking structure in Qatar. 

Yet despite the astronomical GDP figures from the frontier economy, the stock market hasn’t reflected the same rate of growth. In 2011 the Qatar Exchange (QE) only added 1.1%, in what was a very difficult year for global markets. 

Shares are currently trading at a 13% discount, at 0.88c compared to the underlying NAV of the trust valued at $1.05.