CAIRO May 14 The Libyan Investment Authority
(LIA), the oil producer's sovereign wealth fund, plans to invest
billions of dollars in the local stock market to help fund badly
needed infrastructure projects, its new head said in a
Chairman Abdulmagid Breish also said the LIA, which owns
assets worth $66 billion, plans a special fund to cover future
budget deficits - a timely idea as protests at oil facilities
undermine public finances.
Little has been disclosed about the fund's future investment
strategy since the overthrow of Muammar Gaddafi in 2011. The LIA
has been busy getting released assets temporarily frozen abroad
during the 2011 uprising war.
The Libyan Local Investment and Development Fund (LLIDF),
jointly set up by the LIA and central bank, will boost its
investment in the nascent local bourse, giving a lifeline to a
tiny and illiquid market, Breish said.
The government has tried to attract foreign investors to the
bourse but a lack of liquidity - some shares hardly move for
days - has deterred even local firms from floating their stocks
or investing there.
"The LIA wants to pass 20-30 percent of its future LLIDF
investments through Libya's nascent stock exchange," Breish told
the Libya Herald, a Tripoli-based online magazine, without
The stock market investment would benefit infrastructure
projects such as a multi-billion plan for a medical city, he
Breish also said the LIA proposes a fund to set aside
surpluses from oil exports to cover possible future budget
deficits, following recommendations by the World Bank and
International Monetary Fund (IMF).
"This would be a short term investment fund as it is
designed to remain liquid. If the government faces a deficit in
any given budgetary fiscal year it can borrow from this fund for
the fiscal year in question."
Libya expects a budget deficit for this year, the second
consecutive, after 10 months of protests at oilfields and ports
that have reduced oil production - the country's economic
lifeline - to 250,000 bpd from 1.4 million bpd in July.
The LIA was set up in 2006 under Gaddafi to manage Libya's
oil dollars and diversify its economy. It has stakes in Italian
bank Unicredit as well as oil and gas group Eni and is invested
in shares, bonds, other financial products and holdings in
Breish said the LIA had revalued its assets given the fact
that no audit had been conducted since 2007. Future investments
would be made through a board, not by individuals like during
the Gaddafi era when decisions were sealed at the top.
(Reporting by Ulf Laessing; Editing by Mark Heinrich)