Notice that this article in Arabian Business chose to put a provocative headline on this Reuters story. Qatar’s stance, at least in public, that it is holding off on US banks for now, is consistent with other reports of Gulf State sovereign wealth funds having cooled to US banks’ fundraising efforts. But note also that, at least according to Google News, this story has gotten little play in general and none in the US.
From Reuters:
Qatar’s prime minister, who heads the country’s $60 billion sovereign wealth fund, said he favours investing in European over US lenders because US bank stocks are likely to fall further on subprime-mortgage writedowns.
Qatar, which bought “under” 2% of Credit Suisse, is looking to spend between $10 billion and $15 billion over the next two years on bank stakes to diversify the country’s economy from oil and natural gas, Sheikh Hamad bin Jassim Al-Thani said in an interview in Doha, Qatar.
“In the United States, we need to wait a little,” Sheikh Hamad said late on Saturday. “We think there are still problems with the banks.”….
The Qatar Investment Authority (QIA), whose assets Standard Chartered puts at $60 billion, is considering making an investment in Britain’s second-biggest bank, the Royal Bank of Scotland, the Sunday Telegraph newspaper reported, citing people familiar with the QIA’s plans.
The newspaper was the first to report Qatar’s interest in Credit Suisse, saying in January that the QIA was looking to build a 5% stake in the Swiss lender worth $3 billion….
“We are buying them for the long-term strategic holding and it’s not for selling,” Sheikh Hamad said, adding he had made no decision yet about whether to buy more.
“We believe in the bank,” he said. “We are also buying stakes in other banks and this is to create a basket.”
Credit Suisse stock is down 22.5% and Royal Bank of Scotland almost 15% this year. Citigroup, too, has fallen almost 15% this year and Merrill Lynch 1.2%, according to Reuters data.
Qatar, which has a population of about one million and is the richest Arab country per capita, may consider adding to its 15% stake in the London Stock Exchange, Sheikh Hamad said.
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2 ways to look at this:
1. bad for banks
2. buy signal
Why should the cash rich Gulf Banks
take a chance on Us banks at this very moment?Good buying opportunity?
Or maybe they are appalled at the very shoddy management of these institutions.Personally,I believe they are right to abstain from any
involvement in the US at the moment.