Qatar is accumulating shares in Credit Suisse Group and plans to spend as much as US$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," Sheikh Hamad bin Jasim bin Jaber al-Thani, who is also chief executive officer of the Qatar Investment Authority, said in an interview on Sunday in Doha.
Persian Gulf sovereign wealth funds (SWFs), whose coffers are swelling with near-record oil prices, and counterparts in Asia have been snapping up stakes in banks with balance sheets battered by US subprime mortgage losses.
Citigroup Inc. has received US$14.5 billion from investors, including the governments of Singapore and Kuwait, since the middle of December.
"Sovereign funds will keep scooping up more US finance stocks this year," said Walter Lin, the Shanghai-based chief representative of Morley Fund Management, Aviva Plc's fund-management company.
"They're more removed from Wall Street than other investors, and so have a more sanguine view of the subprime crisis," he said.
A spokeswoman for Credit Suisse in Hong Kong directed calls to the firm's Zurich headquarters, where they weren't immediately answered.
Last Tuesday, Credit Suisse said fourth-quarter profit fell 72 percent after writedowns of 1.3 billion Swiss francs (US$1.2 billion) on debt and leveraged loans. The stock has plunged 33 percent since an Oct. 10 peak.
Brady Dougan, chief executive officer of Switzerland's second-biggest bank, scaled back risky investments before the debt-market slump that forced UBS AG, Switzerland's biggest bank, to take a US$14 billion charge.
SWFs have recently made investments in Citigroup, Merrill Lynch & Co, Morgan Stanley and UBS. Wall Street banks have raised US$59 billion, mostly from investors in the Middle East and Asia. Citigroup alone was propped up last November by a US$7.5 billion investment from the Abu Dhabi Investment Authority, the world's richest sovereign fund, after losing almost half its market value.
China Investment Corp., which manages the nation's US$200 billion sovereign wealth fund, spent US$5 billion last year buying a 9.9 percent stake in Morgan Stanley. Singapore's Temasek Holdings Pte paid US$4.4 billion for a stake in Merrill Lynch.
The growing dependence of US banks on SWFs has fed calls in the US for greater scrutiny of the investments. Asked about these concerns, particularly those being aired in Washington, Sheikh Hamad said he was surprised by the resistance and that the idea is to help financial institutions.
"The sovereign fund is from friendly countries, especially this region," he said "They have no political ambitions. They are looking to invest their wealth for the people of these countries."
He was speaking in an interview with Bloomberg Television before attending the opening of the Brookings Doha Center, a project of the Saban Center for Middle East Policy based at the Brookings Institution in Washington.
Sheikh Hamad also announced Qatar is creating October 1 billion funds in Finland and Malaysia similar to the fund Qatar's Investment Authority announced in December that it was starting with Indonesia.
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