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Sovereign Wealth Funds: $7 Trillion Reasons to Stay Invested
In February, I wrote that the decline in stocks was just about over. Why?
There was more money available to buy shares than at any time in almost two decades. The $8.85 trillion held in cash, bank deposits and money market funds was equal to 74% of the market value of U.S. companies, the highest ratio since 1990, according to the Federal Reserve.
What happened in the past when cash reached these levels?
- In September 1974, cash on hand reached $604.5 billion, representing a record 1.21 times the U.S. stock market’s capitalization. That preceded a 31% gain in equities between October 1974 and…
Kuwait Sovereign Wealth Fund Considering Bigger Citigroup and Merrill Stakes
Struggling U.S. financials Citigroup Inc. (C) and Merrill Lynch & Co. Inc. (MER) may get another equity injection from state-owned Kuwait Investment Authority (KIA), the fund’s managing director told Reuters.
Their valuations would make it tempting – as both firms are trading near their 52-week lows – but Bader al-Saad said it’s more about the companies’ plans for recovery.
“In Citi or Merrill, if there is good opportunity, we will look into it. Do we increase our stake? It all depends on the performance and strategy,†Saad said when asked whether KIA might raise its stakes in both troubled U.S. banks.
In January,…
4Jun2008 | Money Morning | Comments Off | Continued
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