Kuwait SWF invests $1.1bn in local market

DOMESTIC FOCUS: The KIA plans to invest more than $1 billion in the local stock market. (Getty Images)

The Kuwait Investment Authority (KIA), the sovereign wealth fund, stepped up investments at home and prepared to hunt for bargains in Asia, after saying it had lost interest in US bank bailouts, state media said.

KIA has invested up to 300 million dinars ($1.12 billion) in local stock market funds after the recent slide in shares, newspapers said on Sunday.

The news came as state media reported KIA, which manages Kuwait's massive oil-generated assets, was also seeking to boost investments in Asian emerging markets, among them Singapore.

Daily Al-Qabas said in an unsourced report KIA poured between 280 million dinars and 300 million dinars into several stock market funds managed by seven investment firms at the end of last week.

The funds, managed by Global Investment House and investment firms, would start buying shares from Sunday. The Kuwaiti bourse was up 1.3 percent by 0750 GMT in line with other Gulf markets.

Daily Al-Rai put the KIA investments at 250 million dinars to 300 million dinars, while Al-Watan said around 200 million dinars had been transferred to investment funds so far.

Al-Rai said investments by KIA and funds might reach around 500 million dinars in the next few days.

KIA officials could not be immediately reached for comment.

Last week, KIA Managing Director Bader Al-Saad said there was no limit to the amount the wealth fund might spend on the local bourse after the Arab world's second-largest stock market took a hit like other Gulf bourses.

KIA has been invested in the Kuwaiti bourse for decades and is a major shareholder in some of the biggest companies such as cell operator Mobile Telecommunications Co. (Zain).

In total, KIA has disclosed investments on the Kuwaiti bourse worth 3.4 billion dinars, according to the Al-Joman Centre for Economic Consultancy.

Al-Saad also said last week KIA would consider investments in the real estate sector and financial industry in the United States, Europe and Asia but not bail out troubled banks.

KIA has come under fire from some parliamentarians for investing in January $5 billion into US banks Citigroup and Merrill Lynch. Merrill has since then been bought by Bank of America.

Al-Saad gave no details about future investments but Kuwaiti officials have said Asia would play a role.

KIA was investing in Singapore as part of a strategy to boost exposure to emerging markets in Asia, Kuwait's ambassador to the city-state, Abdul-Aziz Al-Adawani, told state news agency KUNA on Sunday.

KIA laid the foundation for a real estate project in Singapore on Friday in which the major OPEC producer has a 33 percent share, KUNA said.

In 2006, Al-Saad said KIA's board had decided in 2005 to lift its Asia investments to 20 percent from 10 percent. No new target has been published since then.

Kuwait's finance minister, Mustapha Al-Shamali, said in July KIA was looking to boost investments across asset classes in Asia, particularly Japan, India and China.

A Kuwaiti delegation including Al-Saad and Al-Shamali went on an Asian tour earlier this year to boost economic ties and sound out new investments, including looking into farms to secure food supplies as the desert state grapples with rising import costs.

In August, Al-Shamali told state news agency that KIA planned to as much as triple investments in Japan to $48 billion. (Reuters)

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