Qatari stocks slipped to hit a six-week low on Wednesday following the shock resignation of the head of soccer's governing body, which sparked fears that Qatar could miss out on hosting the World cup in 2022.
The morning after Sepp Blatter's announcement that he will step down as FIFA president just days after securing another term in office, the Qatar Exchange in Doha fell as much as 3 percent not long after market open before paring losses to trade around 2.5 percent lower.
Doha is set to host the World Cup in 2022, but after FIFA officials were arrested last week on charges relating to alleged bribes and kickbacks meant to influence the choice of World Cup host countries, including Qatar, worries about the future of the country hosting the event have surfaced.
"The World Cup forms a central part of Qatar's broader vision to establish itself as a regional finance and business hub. The economic impact of losing the event would be substantial. With around $300 billion being spent on tournament infrastructure, construction is set to be an important driver of economic growth over the next seven years," deputy head of MENA at Verisk Maplecroft, Torbjorn Soltvedt, told CNBC.
While no country has ever been stripped of the World Cup, Qatar has already faced corruption allegations relating to its hosting of soccer's biggest event.
"Although Qatar would be able to absorb the shock of losing the World Cup economically, losing out on the tournament would badly damage the country's prestige," he added.
On Tuesday, Blatter said he would leave his post and call a congress to elect a new president as soccer's governing body starts a "profound overhaul." Last week, Blatter—who has led the organization since 1998—won re-election amid ongoing investigations of corruption within FIFA. He said he will continue serving until FIFA holds its next election.
Major sponsors of FIFA welcomed Blatter's resignation, with the likes of Coca-cola, Adidas and McDonalds cheering the "positive" steps towards reforms.
"We respect Mr. Blatter's decision. The announcement is a positive step for the good of sport, football and its fans," a spokesperson for Coca-Cola said in a statement, while Adidas said the news marked a "step in the right direction on FIFA's path to establish and follow transparent compliance standards in everything they do."
Analysts at Citi said Qatar losing the right to host the FIFA World Cup was "within the realm of possibility," last week following the arrests, adding that the news was "bearish" for the Arab emirate's banks.
"Could Qatar lose the World Cup? Our sense is that it's unlikely but definitely within the realm of possibility," Citi analyst Josh Levin said in a research note ahead of Blatter's resignation.