Qatari insurer closes branch in Abu Dhabi
People walk by the sea in Doha, Qatar.
dubai - Qatar Insurance Company said its Abu Dhabi branch would shut because it could not renew its licence
A Qatari insurance company is closing its branch in Abu Dhabi because authorities there have not renewed its licence.
Qatar's stock index also hit a five-year low on Monday because of concerns over the impact of the diplomatic dispute on some of its companies.
Qatar Insurance Company said its Abu Dhabi branch, open since 2002, would shut because it could not renew its licence. In response, the firm's share price dropped 2.3 per cent; the branch earned gross premiums of about $30 million annually.
In the initial weeks after the UAE, Saudi Arabia, Bahrain and Egypt cut diplomatic and transport ties with Doha on June 5, many long-term investors sat tight, hoping the dispute would be resolved soon and allow normal business to resume.
Gulf investors withdrew deposits from Qatari banks and pulled funds out of Doha's stock market, but with the exception of Qatar Airways, Qatari companies continued to operate in the four Arab states.
Now, however, there are indications that the damage to business ties may last for many years, as Qatari firms begin to close operations and sell assets.
"The pull-back by Qatar Insurance is another sign that the fraying of political ties between Qatar and its Gulf neighbours is also damaging economic ties," said Jason Tuvey, Middle East economist at Capital Economics in London. "The move suggests there is little confidence that relations will improve any time soon, and we could see more Qatari corporates downsize or withdraw their operations in the rest of the region." - Reuters