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Move to revive liquidity of the general reserve

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KUWAIT CITY, Jan 25: Kuwait Investment Authority (KIA) is currently looking into strategic options for full and partial investments according to the approved mechanisms for the coming period, reports Al-Rai daily quoting sources. Sources disclosed this move is aimed at reviving the liquidity of the State’s general reserve, most notably the transfer of Kuwait’s assets in foreign operating institutions and entities. Sources said this is in addition to some local generating assets that are not included in the Future Generations Fund to be exchanged for cash based on the current market prices. Sources confirmed that the options are aimed at strengthening the general reserve in accordance with a technical vision set by the KIA; including the exit of some assets and privatization of existing companies, some of which are being restructured by offering shares to the private sector and citizens in cooperation with the concerned authorities.

They pointed out that the stability of oil prices – from $85 to $90 per barrel – or if the prices increase, will enable KIA to provide basic financial benefits for government institutions estimated at about KD3 billion in the next six months. They said this amount will cover the costs of projects completed by companies and financial entities, housing care entitlements,Kuwait Credit Bank capitalization and other needs. Sources affirmed that Kuwait Petroleum Corporation (KPC) is regularly transferring a large portion of oil revenues, which will strengthen the State’s general reserve; while the whole issue will be forwarded to the Ministry of Finance to take the appropriate action. They asserted there will be no surpluses in the monthly expenses, which include the salaries of employees in the government sector and others that require monthly liquidity.

They confirmed this is in line with KIA’s plans regarding the payment of benefits and external debts estimated at $3.5 billion in March. Sources revealed KIA is currently preparing its annual plan that will be presented to the Ministry of Finance soon. Sources said the plan includes expanding investments in international and Gulf markets, reducing its portfolios in other global markets and channels by exiting from them and putting proceeds into more profitable investments, rebalancing of specialized portfolios to ensure balance in the sectors that KIA is focusing on, achieving the needed diversity since reports indicate that the authority has achieved great returns in global markets which were offset by the noticeable impact of what happened in regional markets, including the Turkish market, due to the depreciation of their currencies.