Kuwait sells Citigroup stake, makes $1.1 billion

Kuwait's sovereign wealth fund said on Sunday it had sold its stake in US bank Citigroup, making $1.1 billion in profit.

Kuwait Investment Authority (KIA) transferred the preferred stocks it owned in Citigroup to normal stocks and sold all of them for $4.1 billion, KIA said in a statement.

"Kuwait Investment Authority had invested an amount of $3 billion in Citigroup in the form of preferred stocks in January 2008," KIA said. Kuwait's sovereign wealth fund, which manages state assets in the world''s fourth-biggest oil exporter, has come under fire from some parliamentarians for investing $5 billion in Citigroup and Merrill Lynch.

Merrill Lynch has since been bought by Bank of America. The value of foreign assets managed by the KIA, fell by about 9 billion dinars ($31.33 billion) in the nine months to December 2008, due to the financial crisis, two lawmakers said in February after a government briefing. KIA managed assets worth about 49 billion dinars at December 31, the MPs said.                                           

Since October 2008, KIA has reduced the exposure of its key Future Generation fund to global equities markets, shifting assets to cash funds, the government said in January.

In May, Kuwait's finance minister Mustapha al-Shamali told Reuters that the Gulf state was not reducing its dollar assets and was keeping some liquid assets to meet its budget requirements.