Deutsche Bank ==  $2 tril problem     Investors are hurting from Deutsche Bank"s share price collapse, none more so than Qatar.

The wealthy Gulf state bought into the struggling German lender back in 2014,
when it injected 1.75 bil euros ($2 bil)
in return for about 60 mil shares.

 

The stock has fallen more than 50% in 2016, and 17% this month alone. Fears about the bank"s ability to make money, and whether it can afford a looming U.S. fine for selling toxic mortgages a decade ago, have sent investors running for the exit.

Related: Does Deutsche Bank need a bailout?

Not Qatar, however. Former prime minister Sheikh Hamad bin Jassim Al Thani, who owns the Deutsche Bank (DB) shares via 2 Caribbean-registered investments firms, increased his stake in 2015, and again a few months back.

That made him the biggest single shareholder ahead ofBlackrock (BLK).

The bank revealed in July that the Qatari"s firms --
Paramount Services Holdings and
Supreme Universal Holdings
 each owned just under 5%.

"We are pleased that our Qatari shareholders are banking on the success of Deutsche Bank as shown through their long term holdings," said Paul Achleitner, Deutsche Bank chairman, in a statement in July.

In return, Al Thani got to nominate a director to Deutsche"s supervisory board.

But Qatar"s loyalty is costing it dearly. It"s not clear how much the Qatari royal paid for the additional shares he bought in 2015 and earlier this year, but the stock has been sliding constantly, and accumulated losses on the holding could be closer to $2 billion.

Oil and gas rich countries in the Middle East have been investing their wealth in global companies and banks as part of a strategy to generate alternative streams of income

 

Qatar came to the rescue of Barclays (BCS) during the global financial crisis, injecting billions of pounds and helping the British bank dodge a government bailout. It"s still the biggest shareholder with about 6%.

It"s also a top three investor in Credit Suisse (CS).

All three banks are hacking away at costs and overhauling their businesses. But it may be a very long time before Qatar sees any return on its investment. Barclays stock is down 25% this year, and Credit Suisse has lost 40%.

The Swiss bank"s CEO Tidjane Thiam was reported to have told a Bloomberg conference earlier this week that European banks are "in a very fragile situation" and "not really investable as a sector."

Deutsche executives must be hoping Qatar doesn"t share that view. They may need to ask it again for help.

=============
vw
 

Volkswagen emission cheating scandal has already cost Qatar nearly $5 bil

The oil nation is one of the largest shareholders in Volkswagen (VLKAF), with a 17% stake in the company. As the company"s shares plunged, the tiny oil nation saw billions of its investments vanish.

 

Qatar"s stake at Volkswagen is one of the largest investments the country"s $256 billion sovereign wealth fund has ever made.

Volkswagen"s emission cheating scandal has wiped out a third of the company"s overall value -- about 25 billion euros ($28.5 billion).

Its shares closed down 17% on Monday and slid another 17.6% on Tuesday as more details emerged about how the German carmaker rigged its emission test results.

Related: Volkswagen scandal widens

But shareholders are likely to see their investment suffer even more. Volkswagen issued a profit warning on Tuesday, saying it will not meet its earnings targets for this year. It said it was setting aside 6.5 billion euro to deal with the issue, but added the "amounts may be subject to revaluation."
 

The shareholders are the biggest victims of this...they are losing a lot of money. Whether this translates to a reduction in demand remains to be seen," Theo Vermaelen, professor of finance at INSEAD business school, said.

The scandal spread on Wall Street Tuesday, as most major automakers saw their share prices slide. Germany"s Daimler (DDAIF) and BMW (BAYRY) are down 4%. Peugot (PUGOY) has lost 7%,Renault (RNLSY) is down 6%, and Fiat (FCAM) shed 4.5%.

The heavy losses have pushed the German benchmark stock index Dax down 2.6%.