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Sat 10 Dec 2011 11:18 AM

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Kuwait urged to snap up distressed assets in Greece

‘Lucrative opportunities’ emerging from austerity-driven recession, says trade official

Kuwait urged to snap up distressed assets in Greece
Athens, Greece. The European state has been brought to its knees by a debt crisis

Kuwait businessmen should look to capitalise on the distressed assets emerging from the Greek economy’s debt crisis, the head of an Arab-Greek trade body has said.

Christos Folias, chairman of the Arab-Greek Chamber of Commerce and Development, said investors could yield good returns on opportunities that have appeared from an austerity-driven recession.

The crisis has “resulted in some lucrative opportunities,” he told Kuwait’s state news agency, Kuna. The Greek government is “keen to offer all needed facilities for Kuwaiti businessmen.”

A state delegation from Kuwait visited Greece last week at the invitation of the government.

Soaring public spending and a huge public sector wage bill has left Greece with a debt pile of more than €340bn ($456bn). Last year, the IMF and European Union agreed with Athens a three-year, €110bn bailout package to help the country avoid bankruptcy.

Gulf sovereign wealth funds have been among the largest investors in Europe for several years, with gas-rich Qatar leading the field with stakes in prominent UK, German and Spanish firms. But the funds have been comparatively wary of directly targeting euro zone assets, such as troubled European debt.

Saudi Arabia's central bank said in October it had no plans to buy up European sovereign bonds and would not look opportunistically at distressed or special assets.

Kuwaiti Finance Minister Mustafa al-Shamali said in October the country was keen to invest in Europe, but the Gulf state has not yet completed any deals.  

 “Despite some earlier announcements in the recent past, we have not seen investments specifically made toward euro zone distressed assets whether being in the real economy or on financial products (debt), said Philippe Dauba-Pantanacce, senior economist at Standard Chartered Bank.

“The approach tends to be pragmatic, educated, targeted and responding to very specific needs for the given Gulf fund or entity. Not the other way around.”

Kuwait, the world's No. 6 crude exporter is one of the richest countries globally with its sovereign wealth fund, Kuwait Investment Authority, managing assets in excess of $290bn.

It owns stakes in Citigroup, Daimler, and Agricultural Bank of China among other companies.

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