Kuwait steps in to sure up Citigroup and Merrill

Kuwait agreed to invest $5 billion in Citigroup and Merrill Lynch & Company as the two US banks scramble for capital after billions in writedowns.

State-run Kuwait Investment Authority (KIA), a sovereign wealth fund with at least $225 billion of assets, said it would invest $3 billion in Citigroup and $2 billion in Merrill.

"As a long-term investor, the KIA believes that the markets currently provide attractive investment opportunities in the financial sector," the KIA said in a statement on Tuesday.

The news comes as Saudi Prince Alwaleed bin Talal said he is among investors helping Citigroup, which posted its first quarterly loss since its creation in 1998.

The royal, a nephew of Saudi King Abdullah, is Citigroup's largest individual shareholder, owning 3.6% of the biggest US bank by assets through Kingdom Holding, which he controls. He owns 95% of the Riyadh-based firm.

Gulf Arab states and companies, buoyed by record oil prices to the world's largest oil-exporting region, spent about $60 billion on foreign assets last year, almost double the previous two years combined.

State-run Abu Dhabi Investment Authority agreed in November to buy $7.5 billion of stock in Citigroup.

Saudi investors were among those that agreed to buy a stake in UBS AG, the UK's Financial Times reported last month, after the Swiss bank said it plans to sell a mandatory convertible bond for 13 billion Swiss francs ($11.97 billion) to two investors, including the Government of Singapore Investment Corporation

Citigroup reported a $9.83 billion fourth-quarter loss on Tuesday. Merrill said on Tuesday it was offering US, Asian and other investors $6.6 billion of preferred shares.

Citigroup shares fell 3.4% to $28.06 in pre-trading after the fourth-quarter earnings were announced.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM