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Mon 24 Nov 2008 11:38 AM

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Kuwait withdraws $3.6bn from abroad

Kuwait Investment Authority liquidates assets as it invests more at home, paper says.

The Kuwait Investment Authority (KIA), which manages the Gulf Arab state's assets, has withdrawn about 1 billion dinars ($3.66 billion) from abroad as it invests more at home, a newspaper said on Monday.

Daily Al-Qabas said in an unsourced report that KIA was moving part of its funds back home as it is setting up a government portfolio to invest in the local bourse which has been hit by the global financial crisis.

Kuwait's governmentasked KIA last week to set up a fund to buy into the bourse as part of measures to restore confidence. KIA officials could not immediately be reached for comment.

Last week, Al-Qabas cited finance minister Mustapha Al-Shamali as saying he will ask state bodies to return part of their overseas deposits to invest in the local stock market through the fund.

Kuwait did not officially reveal the size of the fund, but a government source told newswire Reuters last week the newly proposed five-year fund would be worth at least 1 billion dinars and could be increased.

KIA is investing across asset classes around the globe. It is a major shareholder in US banks Citigroup, Merrill Lynch and German car maker Daimler.

The sovereign fund has come under fire in Kuwait's parliament for investing in the two US banks earlier this year before their shares took a slide. (Reuters)

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