The Qatar country-specific exchange traded fund plunged Wednesday and briefly tested its short-term supporting level after a sweeping probe alleged rampant corruption in FIFA over bids for the World Cup.
The iShares MSCI Qatar Capped ETF (NasdaqGM: QAT) fell as much as 2.3% early Wednesday but somewhat parred the steep losses in afternoon trading.
In contrast, other emerging markets remained relatively unchanged Wednesday. For instance, the iShares MSCI UAE Capped ETF (NasdaqGM: UAE) was down 0.1% and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) was 0.2% lower.
The Qatari QE Index declined 1.5% Wednesday, the most since April 1, in response to the FIFA corruption charges and Qatar’s awarded right to host the 2022 World Cup, reports Dana El Baltaji for Bloomberg.
Switzerland investigators are looking into records from FIFA’s headquarters as part of a criminal probe into the 2010 vote that awarded Russia the 2018 World Cup. Meanwhile, in the U.S., charges detailed “rampant’ corruption in international soccer, including bribes and kickbacks for contracts to market and televise tournament.
“The Qatari market is real estate and banking centric, and the World Cup event is very important to these two sectors,” Nabil Rantisi, the managing director of brokerage at Mena Corp. Financial Services, said in the Bloomberg article. “Since companies in those are the two biggest sectors represented on Qatar’s index, it’s only natural the gauge would drop.”
The country has planned $200 billion in projects including stadiums, roads and hotels in anticipation of hosting the World Cup event.
QAT includes a hefty 59.6% tilt toward the financial sector, followed by industrials 15.1%, telecom 7.8%, energy 5.6%, utilities 4.7% and materials 3.5%.