x Abu Dhabi, UAETuesday 19 September 2017

QIA trims Tiffany stake in latest selldown amid economic crisis

Fund has injected $40bn into local economy as standoff with neighbours continues

The Qatar Investment Authority's sale of Tiffany shares comes as Qatar's economy faces regional pressure. Michael Nagle / Bloomberg
The Qatar Investment Authority's sale of Tiffany shares comes as Qatar's economy faces regional pressure. Michael Nagle / Bloomberg

Qatar’s sovereign wealth fund sold a block of shares in luxury jewelry retailer Tiffany & Co. weeks after reducing stakes in Credit Suisse Group and Rosneft.

The Qatar Investment Authority sold 4.4 million shares in a block sale valued as much as US$417 million via Morgan Stanley, according to a statement provided to Bloomberg by the US bank on behalf of the holder. The fund still holds a stake of 9.5 per cent after the sale through subsidiary Qatar Holding USA, according to the statement. The shares were offered at $94.4-$94.75, a person familiar with the process said.

The sale comes after the QIA reduced its direct shareholding in Credit Suisse to 4.94 per cent in August - the fund’s first reported sale of shares in the Swiss bank since 2008. The QIA and Glencore  last week also agreed to sell most of the stakes they purchased in Rosneft in December. Closely-held CEFC China Energy will pay about $9 billion for most of the shares they purchased in December, leaving the Qatar fund with a 4.7 per cent holding.

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The QIA, which was created to handle the windfall from the world’s largest liquefied natural gas export base, plans to spend most of what remains of its $45 billion investment target on US investments as it seeks to diversify its assets, chief executive Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said on Wednesday. The fund, which has amassed a $320bn portfolio around the globe, has bought assets ranging from British bank Barclays to Total and Glencore. It ranks as the ninth largest globally, according to the Sovereign Wealth Fund Institute.

The QIA has injected almost $40bn, out of total reserves of $340bn, to support its economy and financial system during the first two months of a diplomatic standoff with its Gulf neighbors, according to Moody’s Investors Service. The fund injected deposits into local banks to shore up liquidity as the ongoing Saudi-led campaign hurts lenders, people familiar with the matter said in June. Capital outflows from Qatari banks were about $30bn in June and July, Moody’s said.

The QIA boosted its stake in Tiffany to 8.7 per cent at the end of 2012, according to a 2013 regulatory filing. Tiffany shares closed down 1 per cent at $95.51 on the New York Stock Exchange on Wednesday.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and transport links with Qatar on June 5, accusing the nation of supporting Sunni extremist groups and Iranian-backed militants. Qatar has repeatedly denied the charges. The dispute pits US allies against each other in a struggle over political dominance in a region that controls about a fifth of global oil supplies.