KIA seeks to up volume of cash portfolios & bonds investments

‘Precautionary measures’

KUWAIT CITY, Aug 18: The Kuwait Investment Authority (KIA) is seeking to increase the volume of cash in its portfolios, in addition to increasing the proportion of its investments in bonds, as part of its precautionary measures to avoid potential risks against any crisis in the global financial markets, especially after the failure of many major economies resulting in worrisome deflationary recession in the world, reports Al-Qabas daily quoting sources.

The sources pointed out the KIA had sensed the signs of a possible crisis which appeared in indices two years ago, which led to change the amount of its contribution in stocks against bonds and cash.

The sources added: “The KIA has been monitoring for some time the possibility of a new crisis in the markets, due to the trade war between the United States and China, in addition to economic developments in Europe, which led it to resort to reduce the proportion of shares in its portfolios, and increase the size of the cash through calculated exits since some of the investments are vulnerable to the crisis.

Sources explained that the main role played by the KIA is to achieve a return on the long-term investment of financial reserves, which was mandated to manage on behalf of the government, using the highest professional standards, and to ensure the provision of an alternative source of revenue for oil revenues, where it updated its investment strategy to move within a long-term investment horizon.

It has the ability to take risks and absorb short-term market fluctuations, by thoroughly studying the areas where it intends to invest, and examine several factors, financial, economic and regulatory indicators, including economic growth, ease of business index, tax facilities, exit strategies from the market and other factors

Sources pointed to the KIA’s keenness to diversify investments in order to help achieve the targeted returns, and the lowest possible risks, where its investments are distributed in various types of investment assets, including investment in stocks, bonds, private equity funds, alternative investments and real estate, while retaining a portion of liquid funds to use when needed.