Follow the QE, Kuwait Investment Authority to Cut US Investments
The Kuwait Investment Office (KIO), a sovereign wealth enterprise of the Kuwait Investment Authority (KIA), plans to slowly pullback on U.S. equities after being overweight for seven years. Reuters news broke the story from reporting at a conference in Abu Dhabi. Osama al-Ayoub, head of the Kuwait Investment Office, said the unit wants to invest more in European equities. London-based KIO has an extensive history of investing in European equities. Other institutional investors are following suit, betting on quantitative easing (QE) by the European Central Bank (ECB) to boost asset prices.
In March, the ECB will begin its programme on sovereign bond purchases. A major consequence is that a number of countries are having their government bond yields go negative. Countries such as Finland, the Netherlands, Denmark and France have been able to sell sovereign debt at a negative yield – paying the government to hold money. Negative bond yields could be a contributing factor to boost European listed equities.
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