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Sun 16 Oct 2011 03:45 PM

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Kuwait wealth fund aims to boost China investments

Asian giant has ‘huge potential’ for Kuwait state-backed fund, says top official

Kuwait wealth fund aims to boost China investments
Kuwaits wealth fund has opened an office in China

Kuwait Investment Authority (KIA), the Gulf state's
sovereign wealth fund, plans to boost its investments in China after opening an
office in the world's second largest economy, a KIA official told the state
news agency.

"China has huge potential, which presents opportunities
that KIA can seize on the back of China's steady economic growth," Fahad
al-Shatti, the head of KIA's newly opened office in China, was quoted as saying
by KUNA on Sunday

Kuwait, the world's No. 6 crude exporter is one of the
richest countries globally with its sovereign wealth fund, KIA, managing assets
in excess of $290bn. It owns stakes in companies such as Citigroup, Daimler and
was a cornerstone investor in the initial public offerings of Agricultural Bank
of China and insurer AIA Group.

While Gulf funds have historically preferred to invest in
Europe, many may turn their gaze eastward as growth slows. But analysts say
that investments into Asia is tricky given regulatory constraints and increased
competition from local funds like Temasek and GIC.

Kuwait is open to any investment opportunities in Europe if
they are compatible with risk controls, the OPEC member's finance minister
Mustapha al-Shamali was quoted as saying by the state news agency last week.

Shatti said he hopes that the KIA hopes to get permission
"very soon" to start trading in the Shanghai Stock Exchange , as
China plans to allow foreign companies to trade on the bourse. Current
regulations allow foreign companies to trade only on the Hong Kong bourse, he

Sale of Kuwaiti oil and crude products to China grew from
$400m in 2004, to about $10bn now, Shatti said.

Kuwait Petroleum Corp, the country's state oil company, is
working on a $9bn joint project with Sinopec to build an oil refinery and
petrochemical plant in southern China. The project, potentially one of China's
biggest foreign investments, would be 50-50 owned by Sinopec Group, a parent of
top Asian refiner Sinopec Corp.

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