Business | Markets
Financial crisis could affect Gulf investments in US
Preliminary indications show that investments of more than 700 billion Saudi riyals (Dh679 million) made by the members of the Gulf Cooperation Council (GCC) in the United States might have been affected by the current global crisis.
- By Mariam Al Hakeem, Correspondent
- Published: 23:50 October 14, 2008
Riyadh: Preliminary indications show that investments of more than 700 billion Saudi riyals (Dh679 million) made by the members of the Gulf Cooperation Council (GCC) in the United States might have been affected by the current global crisis.
Gulf investments in the US alone exceed two trillion riyals, a major portion of which is by the government. Thus, the biggest losers would be Gulf banks and investment firms, in addition to over 50 private investors and businessmen.
Dr Mohammad Al Jaser, deputy governor of the Saudi Arabian Monetary Agency (Sama), declined to comment on the channels through which the central bank made investments in the US.
He asserted that Sama's investments are safe.
"Sama is and will not make investments through any channels that are exposed to risks," he said.
A report by SABB (Saudi British Bank) showed that investments by the Saudi private sector worldwide amounted to about 4.69 trillion riyals, of which 1.58 trillion riyals were made in the US.
Several Saudi investors told Gulf News they have so far withdrawn up to 30 per cent of their investments this month and then pumped them into the Gulf market. Khalid Al Ateeq said he lost 15 per cent of his portfolio value in the recent market turmoil in the US. "Increasing losses prompted me to withdraw a portion of my investments from the US and pump it into the GCC market," he said.
Abdullah Al Barak, member of the Saudi Society of Accountants, said withdrawal of a portion of Saudi investments from the US was expected following the global financial crisis.
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