By Amran Abocar
DUBAI (Reuters) - Asking sovereign wealth funds to commit money to help contain the global financial crisis ignores their own investment losses and highlights Western "hypocrisy" toward the state funds, the head of a major Gulf Arab brokerage said Monday.
The comments came as British Prime Minister Gordon Brown toured the Gulf to drum up cash from oil-rich Arab countries for a new International Monetary Fund facility.
Brown's visit is the latest in a string of high-level trips by Western officials seeking help amid the worst financial crisis in 80 years.
"They got hit with Lehman, they got hit with banks. How can you ask them to come and give more money?" Mohammed Ali Yasin, chief executive of Shuaa Securities, said at the Reuters Middle East Investment Summit.
"People think (wealth funds) are liquid. They are not liquid."
The crisis, which began when a U.S. housing market boom turned sour, has raised fears of global recession. Central banks and governments have spent trillions to defrost frozen interbank lending, save banks from ruin and shore up confidence in markets.
The Gulf has not been immune and states have raised interest rates and deployed wealth funds to insulate themselves against the worst of the crisis.
Saudi Arabia and Qatar have indicated they would help the IMF facility but Kuwait, which is not on Brown's travel schedule, pointedly said on Sunday it would base any decision to support international markets on potential returns and investment opportunities.
"Sovereign wealth funds are in deeper trouble than we are locally," said Yasin, noting their mandate to invest petrodollars abroad to diversify state assets.
"They got hit everywhere else in the world. If they had $800 billion before, they probably only have $400 billion now.
Amid the crisis, wealth funds have been forced to turn their attention inward, pouring billions into local markets and to support banks.
On Monday, two local banks unveiled plans to sell stakes to the Qatar Investment Authority. Qatar announced last month that it would buy up to 20 percent of listed bank stocks' capital.
Meanwhile, the Kuwait Investment Authority (KIA) has deployed funds to support the local market even as small investors stage protests outside the bourse to complain the fund was too busy investing abroad to rescue them.
Just two years ago, the prospect of SWFs from Muslim states snapping up strategic Western firms was enough to raise national security fears and calls for more transparency among such funds.
As a result, the willingness of Western officials to solicit help in the region has raised some eyebrows. Continued...
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