Kuwait mulls $1.7bn rescue plan

The Kuwaiti economic rescue team is studying requests from 10 local investment companies for credit facilities worth KWD492 million ($1.7 billion or Dh6.2bn).

The rescue team has proposed a professional credit rating of the financial situation of these companies to help solve their problems, Kuwait-based Al Watan daily reported yesterday. The rescue team has also proposed regulations to govern preferred shares and bonds convertible into shares, the daily reports.

Bahrain-based Sico said in a report that debt repayment defaults by some Kuwaiti companies "have caused immense concern to investors in regards to the financial viability and transparency of the banking sector.

"Portfolio investment in domestic, regional and international equities and real estate are expected to impact negatively corporate profits in 2009, as most Kuwaiti companies manage such portfolios on their books", Sico added.

Sico said: "Kuwait's financial sector is most likely to negatively impact the economy along with the oil sector in 2009." The Kuwait market has fallen sharply in the past few months on concerns that its investment firms will be hard hit due to their high investments exposure amid a downturn.

Follow Emirates 24|7 on Google News.