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Qatar says worried about value of dollar, euro -CNBC

by on September 29, 2012 5:03 pm GMT
 

RIYADH, Sept 29 |
Sat Sep 29, 2012 1:03pm EDT

(Reuters) – Wealthy Qatar, a major investor
in U.S. and European assets, worries that haphazard attempts by
countries to shore up their economies could weaken the dollar
and the euro, its prime minister said.

“What should happen is we should have a full package with a
full strategy to solve the problems,” Sheikh Hamad bin Jassim
al-Thani, who also heads the country’s sovereign wealth fund,
Qatar Investment Authority (QIA), told U.S. financial
broadcaster CNBC in an interview aired on Friday.

This month the U.S. Federal Reserve announced a programme of
heavy purchases of mortgage-backed securities in an effort to
boost employment, but the U.S. government has so far failed to
reassure financial markets that it has an effective plan to cut
its budget deficit and boost economic growth.

The European Central Bank has also said it will buy bonds to
protect economies from the euro zone debt crisis, but
governments of weak countries such as Greece and Spain have not
persuaded investors their debts can be cut to safe levels.

Sheikh Hamad said the central banks were right to act to
prevent worse crises, but added: “With more printing money,
without having a strategy, I believe the value of the money will
go down very soon.”

He did not give details of the economic measures which he
believed Western countries should be taking, but said the risk
of further volatility in markets was making investors such as
Qatar cautious. Analysts have estimated the size of Qatar’s
sovereign wealth fund at around $100 billion.

“There are some questions with no answer up to now,” he told
CNBC.

However, Sheikh Hamad added that Qatar would retain holdings
of strategic stocks and buy when prices dropped, and that it
would continue to make new investments in promising assets.

He said he was optimistic about the longer-term future of
the banking industry, since better regulation and
capital-raising would strengthen banks after some years. He
noted that QIA had a strategic stake in Credit Suisse
, and owned about 1 percent of Bank of America
and 5 percent of Santander Brasil among
other banks.

The gas-rich Gulf state has bought more than $5 billion or
$6 billion of real estate assets over the last four to five
months, mostly in the United States and Europe, Sheikh Hamad
said. “If there is some good opportunity, why not,” he said of
investing in crisis-hit Europe.

XSTRATA BID

Qatar, which owns just over 12 percent of Xstrata,
will help to determine the success or failure of Glencore’s
$32 billion offer for the miner.

Glencore was forced earlier this month to raise its bid
price, offering 3.05 new shares for every Xstrata share instead
of 2.8, after Qatari pressure. As a condition, however, Glencore
imposed its own chief executive and largest single shareholder,
Ivan Glasenberg, at the head of the combined group.

Xstrata’s directors face a Monday deadline to decide their
position on Glencore’s higher offer.

Sheikh Hamad told CNBC: “We have no problem with the new
price,” but added, “Other aspects (of the proposed deal) have to
be studied.” He declined to elaborate.

AUX

Earlier this week Reuters quoted banking sources as saying
Qatar Holding, one of the country’s investment vehicles, was in
advanced talks to buy a 49-percent stake in Brazilian
billionaire Eike Batista’s gold firm AUX for about $2 billion.

Qatar Holding subsequently issued a statement denying that
such talks had taken place.

However, asked about Qatar’s intentions towards AUX, Sheikh
Hamad told CNBC: “We’re studying it. Still there is no
commitment from our side.” Details of the proposal need to be
presented to the board, he added without elaborating.