Oil-rich Gulf Arabs with huge assets in the West could lose several billion dollars as a result of the deadly terror attacks in the United States, economists and analysts said Thursday, September 13.
Gulf state and private holdings in foreign markets, which include shares, bonds, real estate and other forms of investment, are estimated at several hundred billion dollars.
Saudi private investors, whose foreign assets top $200 billion , are expected to lose some $28 billion as a result of the drop in world financial markets and the closure of US bourses, economists said.
Al-Iqtissadiya business daily quoted the economists as saying the main losses will be in the mutual funds and the insurance sector. "Insurance companies have incurred the biggest loss. The value of Saudi investments in joint funds between local and foreign banks is estimated at $35 billion ," Said Al-Shaikh, chief economist of the National Commercial Bank, told the Saudi daily.
Kuwaiti economist Hajjaj Bukhdour said he expected the emirate's $150 billion private and government overseas investments to drop by at least six percent. "We assume the loss on Kuwaiti assets abroad, whether government or private, is going to be at least six percent; it might be more," he told AFP.
But prominent Kuwaiti businessman Faisal Al-Mutawa said it was too early to gauge Kuwait's economic reaction to the attacks in New York and Washington. "Once the US has retaliated, and retaliated properly, asset values will go up again," said Mutawa, who is on the board of the Kuwait Chamber of Commerce and Industry.
Monetary officials in some Gulf states hastened to stress that the local currency was not affected by the attacks. Saudi Deputy Finance Minister Jabara Al-Sariri said the riyal, pegged against a basket of currencies, mainly the dollar, was not affected by the US attacks.
Kuwaiti Central Bank Governor Shaikh Salim Abdul Aziz Al-Sabah told the daily Al-Anba that the attacks will have "a very limited effect on the Kuwaiti dinar." The Kuwait Stock Exchange was closed on Wednesday, the last trading day in the week, but the Saudi share market continued to operate normally and shed more than 100 points, or 4.3 percent, in the week to Thursday.
Bahraini financial analyst Hassan Al-Aali said the impact of the US attacks on Gulf bourses will be limited. "Some firms listed on the Gulf bourses have investment activities in the US. If they make losses there, the price of their shares will drop here," he told AFP. ― (AFP, Riyadh)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
