Kuwait launches bailout fund for investment firms
Kuwait, November 14, 2008
Kuwait has launched a bailout fund for investment firms as shockwaves from the global financial crisis spread.
The country plans to buy up assets at a discount from investment firms hit by the crisis, the central bank said.
The new plan would purchase stocks, land or real estate from investment firms at a discount and then issue them a promissory note enabling them to borrow from banks and then repurchase the assets at the same price within five years, a government source said.
Kuwait has already slashed interest rates, guaranteed all bank deposits, and allowed the Kuwait Investment Authority, its sovereign wealth fund, to pump cash into the stock exchange.
The bailout fund announcement came as trading on the stock exchange was suspended due to a court order won by investors.
The shutdown follows protests by investors seeking emergency measures to protect their holdings after the bourse fell by 31 per cent this year.
Trading could resume as soon as Sunday, the country's commerce minister said, if a planned appeal against a court ruling to suspend dealings was successful.