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03 March 2024

Kuwait's key investment firms to consolidate

First Investment and Gulf Investment House reached an agreement. (AFP)

By Reuters

Kuwait's First Investment Company and Gulf Investment House have reached an initial merger or acquisition agreement as the Gulf state's investment sector seeks ways to weather a global crisis.

Shares of both firms bucked a downtrend on the bourse as other stocks fell partly on comments from Kuwait's central bank governor that the state would not step in to help investment firms cope with the crisis.

Kuwait Finance House, a major investor in Gulf Investment, and National Investments Company – a key investor in First Investment - did not give details on how the two firms would be consolidated in a statement.

Home to more than 90 investment firms, Kuwait is trying to restore confidence among investors after it was forced to rescue Gulf Bank from collapse in October after the bank reported steep losses related to derivatives trading.

The country's largest investment bank, Global Investment House, said earlier this month it had defaulted on most of its debt, while Islamic investor Investment Dar has also said it needed to secure loans worth as much as $1 billion (Dh3.6bn).

National Investment rose 3.19 per cent and First Investment 1.11 per cent yesterday.

In December, Kuwait launched a fund to stabilise the second-largest Arab bourse, which fell 38 per cent last year.