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Doha: Qatar is accumulating shares in Credit Suisse Group and plans to spend as much as $15 billion on European and US bank stocks over the next year, the Gulf state's prime minister said in an interview.
"We have a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process," Shaikh Hamad bin Jasim bin Jaber Al Thani, who is also chief executive officer of the Qatar Investment Authority (QIA), said in an interview on Monday in Doha.
Arabian Gulf sovereign wealth funds, whose coffers are swelling from near-record oil prices, and counterparts in Asia have been snapping up stakes in banks battered by US subprime mortgage losses.
Citigroup Inc received $14.5 billion from investors including Singapore and Kuwait since mid-December.
"Subprime losses are clearly not confined to US banks and European banks are seeking funding," Giyas Gokkent, head of research at National Bank of Abu Dhabi PJSC, said in a phone interview on Monday.
"Gulf funds have surpluses to spend and are looking for long-term appreciation. If investments help develop their domestic financial markets too, so much the better."
Diversification
Bruno Daher, Credit Suisse's Dubai-based co-CEO for the Middle East, declined to comment when contacted on his mobile phone yesterday, as did Zurich-based spokesman Marc Dosch.
Credit Suisse said on February 12 that fourth-quarter profit fell 72 per cent after 1.3 billion francs of writedowns on debt and leveraged loans.
The stock has fallen 31 per cent since October 10. Brady Dougan, CEO of Switzerland's second-big-gest bank, scaled back risky investments before the debt-market slump that forced UBS AG, Switzerland's biggest bank, to report $14 billion in writedowns.
Sovereign wealth funds in the past six months made investments in Citigroup, Merrill Lynch & Co, Morgan Stanley and UBS. Wall Street banks have raised at least $59 billion, mostly from investors in the Middle East and Asia.
Citigroup alone was propped up in November by a $7.5 billion investment from the Abu Dhabi Investment Authority, the world's richest sovereign fund, after losing almost half its market value.
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