Even though cheaper buys are available in the Western markets – especially in the banking industry after the credit crunch fallout- the Middle Eastern sovereign wealth funds does not seem to be so excited at bargain hunting there.
The region’s oldest sovereign wealth fund Kuwait Investment Authority (KIA) – also the fourth largest global sovereign wealth fund with an estimated size of around $250 billion – has decided to stick to Asia for now, according to a news report. This is despite the fact that in January this year, KIA agreed to invest $3 billion in Citigroup and $2 billion in Merrill Lynch.
Last week KIA reportedly pumped in around $1.12 billion in Kuwaiti stock market after the recent slide in shares globally which also affected Kuwait the second largest Arab stock market. It is now seeking to boost investments in Asian emerging markets.
KIA chief Bader Al Saad has said that KIA would consider investments in the real estate and financial sector in the US, Europe and Asia but would not bail out troubled banks. In 2005, KIA’s board had decided to lift its Asia investments to 20% of the total from 10%.
The Kuwaiti finance minister Mustapha Al Shamali, who incidentally chairs the board of KIA, has indicated that the sovereign wealth fund is looking to boost investments across asset classes in Asia, particularly Japan, India and China.
Sovereign wealth funds have been active investors in the country over the last few years. Though there are a handful of them who have built exposure in the country, the top two funds have been from Singapore—Temasek and GIC who have investments across sectors including some marquee names like ICICI Bank, Bharti Airtel, Tata Sky besides other firms.
Some of the other such funds that have invested in India include Malaysia’s Khazanah and Oman Investment Fund which recently picked a stake in Quippo Telecom.