Kuwait Seeking Exit Strategy For Investments In Foreign Countries

Kuwait is working towards restructuring its foreign investments as part of strategies implemented by the Kuwait Investment Authority (KIA) to focus on sectors that achieve great profit in this coronavirus crisis, which has prompted the preference towards targeting necessity-driven sectors in the coming period, reports a local daily. The sectors that have proven their economic viability during the coronavirus crisis are those sectors of healthcare, food security and medical supplies, which are considered among the most attractive.

According to data from KIA and the sovereign fund, foreign investments are distributed in about 130 countries around the world, and managed by 150 agents and investment managers; the most prominent of the managers are the London office and the United States office. Kuwait, through its Investment Authority, aims to maximize the revenue on investments of the State’s public reserve and funds allocated to the reserves of future generations.

KIA also establishes self monitoring on all of its investments, in accordance with the established rules in the authority, approved by the Board of Directors. Also, it is subject to the oversight of State Audit Bureau and the Supervisory Authority.

Meanwhile, Kuwait is keenly looking into an exit strategy for its investments in some countries under political and financial risks with KIA already mulling serious steps to the effect.

Since KIA studies all available opportunities and selects the best in terms of long-term economic viability, Kuwait boasts vast investments in all countries of the world. According to previous reports, the income generated from Kuwaiti investments has increased by more than 120 percent in the last years.

The daily reports, quoting sources, Kuwait received relatively good returns, given that KIA prefers discretion and rarely takes risks. Government agencies prefer to exercise caution, and is careful not to engage in any investments where the risk ratio exceeds 30 percent of the total volume of investment. This is mainly due to fluctuations witnessed in the global markets over the last period, which is related to trade conflicts between the United States and China, obstacles to Britain’s exit from the European Union and political tensions.

Therefore, Kuwait takes the initiative to restructure the investments exposed to risks and move away from stock markets and reduce exposure to them, while pushing towards the acquisition of bonds that are less risky.

 

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