Q8 wants to know what is happening to the Kuwait stock market:
NOVEMBER 20, 2008 Kuwait, Dubai Tackle Their Ills
By MIRNA DUBAI -- The Persian Gulf governments of Kuwait and Dubai moved to bolster market confidence as the global economic tumult tests leaders in the region and upends business-as-usual mentalities.
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Associated Press
With its market off sharply this year, Kuwait stands ready to buy about $12 billion of shares. Here, the Kuwait Stock Exchange -- temporarily shut after investor protests -- resumes trading Monday. Dubai, too, is taking action.
In Kuwait, an official said Wednesday that the government was planning to pump about $12 billion, if required, into the country's stock market. Abdulmajeed Al Shatti, who sits on a government committee dealing with the financial crisis, said the country's sovereign-wealth fund, the Kuwait Investment Authority, would anchor plans to buy as much as 10% of the value of stocks traded on the Kuwait Stock Exchange.
The main index on the KSE has fallen almost 30% since the beginning of the year. Investors and brokers have staged protests over their losses. They won a court order last week to temporarily close the exchange; the market reopened this week.
Shares in the KSE's All-Share Index closed up 2.7% Wednesday following Mr. Al Shatti's comments about the possible bailout. Mr. Al Shatti, also chairman of Commercial Bank of Kuwait, told Zawya Dow Jones that the plan aims to "stop the panic and boost the liquidity of investment companies."
A spokesman for the KIA declined to comment.
Meanwhile, in Dubai, a senior government official said a new government committee would consider whether to seek a sovereign-debt rating to help raise funds. "We will visit this in 2009. Dubai never needed a rating to borrow, but now it's essential," said Nasser Al Shaikh, the director general of Dubai's department of finance.
Dubai is one of seven semiautonomous emirates that make up the United Arab Emirates. It lacks the sort of oil wealth many of its Persian Gulf neighbors enjoy and has financed much of its recent growth with overseas borrowing. That has analysts worried about its ability to repay or refinance that debt in today's tight credit markets.
Mr. Al Shaikh said the city-state was talking to banks and others about the challenges the economic and financial crisis poses to the city-state. "We do have certain challenges. We shouldn't be in a state of denial, and we have to learn how to face those challenges," Mr. Al Shaikh said.
"We are making various changes to the whole business model. We want Dubai to be the first place to rebound when the recovery starts," he said.
In a report this week, Citigroup Inc. warned that some Dubai-controlled companies face difficulties refinancing debt. Dubai officials have said in the past that the city-state's financing is solid. |
