Kuwait has no intention of selling its investments in US banks Merrill Lynch and Citigroup, in the short term, its sovereign wealth fund said in a newspaper report published on Sunday.
"The Kuwait Investment Authority (KIA) has no intention of selling its investments in Merrill Lynch or Citigroup in the short term, as the authority relies in its investment policies on a long-term view," KIA said in a statement obtained by daily al-Rai and published on Sunday.
Kuwait's sovereign wealth fund, which manages state assets in the world's fourth-biggest oil exporter, has come under fire from some parliamentarians for investing $5 billion in Citigroup and Merrill Lynch. Merrill has since been bought by Bank of America.
Each share bought in Merrill Lynch is now equivalent to 0.8595 share in Bank of America, the report said. KIA's remarks, the paper said, came in response to questions submitted by parliamentarian Waleed al-Tabtabae. KIA has the ability to exit the investments in Citigroup and Merrill if it wanted to, the report said. It added that the value of KIA's investment in Citigroup was about $2.39 billion to November 30, 2008, and about $984 million in Merrill Lynch to December 1, 2008. "We still think that the investment in these two firms is a good investment on the long-term," it said.
The value of foreign assets managed by the KIA, fell by about 9 billion dinars ($31.33 billion) in the nine months to December 2008, due to the financial crisis, two lawmakers said in February after a government briefing. KIA managed assets worth about 49 billion dinars at December 31, the MPs said. Since October 2008, KIA has reduced the exposure of its key Future Generation fund to global equities markets, shifting assets to cash funds, the government said in January.
In May, Kuwait's Finance Minister Mustapha al-Shamali told Reuters that the Gulf state was not reducing its dollar assets and was keeping some liquid assets to meet its budget requirements.
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