Sunday 19 December 2010

Two Thousand Twenty Two « Alpha Dinar- talking GCC finance


World Cup fever is on as the DSM rallied approximately 7% since the day they announced that Qatar won the 2022 bid to host the world cup.
It is estimated that Qatar will spend nearly USD65 billion in infrastructure, which represents 53% of 2010E GPD. USD4 billion will be allocated to building nine new stadiums and renovating three existing ones. USD50 billion will be spent to construct new transport systems. In addition to that, Qatar has promised to provide 90,000 hotel rooms by 2022 (currently they have 15,000 rooms only). The banks will benefit from the stronger economic activity and higher credit demand over the next 12 years. A USD60 billion will be financed by the Qatari banks- combined assets of all the banks as of end of 2009 are USD129 billion. However, a key challenge is for the Qatari banks to secure long term funding to finance these long term projects. Issuance in the credit markets are expected to increase to support the long term funding.
400,000 world cup fans visited South Africa this year, which is equal to 25% of Qatar’s population. This will really boost tourism and consumption in that period. Tourism in South Africa spent around USD2 billion- 1.5% of Qatar’s GDP. Out of all the countries that hosted the world cup, Qatar has the smallest GPD, population and land size.

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