Kuwait's sovereign wealth fund (KIA) should invest in local banks to shore up the economy in the face of the global crisis, the chief executive of National Bank of Kuwait said on Sunday.Kuwait should support the local market through direct investments in the bourse and increase capital expenditures to ease the financial turmoil, Ibrahim Dabdoub told a shareholders' meeting.
"The Kuwait Investment Authority should invest - as it had invested in Merrill Lynch - in NBK, in Kuwait Finance House and other Kuwaiti institutions which have continuous income," he said.
Earlier this month, Kuwait approved a 1.5 billion dinars ($5.09 billion) stimulus package, which still needs parliament approval, to shore up the economy as the global crisis hits the wealthy OPEC producer.
Under the plan, Kuwait will guarantee half of all loans local banks would provide to investment firms to reschedule debt and 25 percent of those from foreign creditors.
Last year, KIA lost money after buying into US banks Citigroup and Merrill Lynch before both stocks nosedived, and the latter was bought by Bank of America for a fraction of the price.
In December, KIA launched an investment fund worth 1.5 billion dinars to stop a slide on the local bourse, which fell 38 percent in 2008.
KIA, which manages the Gulf state's massive oil-generated assets, is a major shareholder in many Kuwaiti companies including heavyweight mobile telecommunications company Zain. (Reuters)