Economic Crisis Hits Sovereign Wealth Funds 


Singapore and Kuwait are reporting billions of dollars in losses to their sovereign wealth funds in the latest symptom of the global economic crisis.

The Singapore state investment firm Temasek Holdings says the value of its investments plunged about 31 percent to $81 billion between March and November of last year.

Temasek has invested heavily in troubled banking companies, including U.S.-based Merrill Lynch and Britain's Barclays.

Kuwait's sovereign wealth fund also has taken a big hit from the credit crisis.

A Kuwaiti lawmaker, Walid al-Tabtabai, says the oil-rich country has lost about $31 billion of its estimated $300-billion fund.

Lawmakers say the loss happened last year between March 31 and December 31. They spoke Tuesday after a briefing by the Kuwait Investment Authority.

A sovereign wealth fund is a government-run investment fund that can be used to stabilize a country's budget, support economic and social development, or push a political agenda.

The funds are made up of stocks, bonds, real estate or other financial instruments funded by foreign exchange assets.

More than two dozen countries hold trillions of dollars in assets in such funds. Many have invested in U.S. banks and financial institutions, but the recent economic crisis has made some investors nervous.

China's sovereign wealth fund announced in December that it did not dare to invest more in Western financial institutions because of their governments' uncertain policies.


Some information for this report was provided by AFP and AP