Credit Suisse collapse burns Saudi investors: link here.
DUBAI—Riding an oil-price boom last year, Saudi Crown Prince Mohammed bin Salman directed government-backed Saudi National Bank to make a $1.5 billion investment in Credit Suisse Group AG that his financial advisers harbored doubts about.
Now, the Saudi investment is almost wiped out after Credit Suisse’s emergency merger with UBS Group AG.
Credit Suisse’s meltdown also erased billions of dollars in investments made by Qatar’s sovereign fund and the Saudi-based Olayan family, making the Persian Gulf one of the biggest losers from a slide in financial stocks since the collapse of two U.S. banks last week.
The Saudi investment in Credit Suisse was meant to be the kingdom’s splashy entrance into the global banking sector, cementing its emerging status as an oil-fueled investing powerhouse. The Saudis struck the deal when oil prices were just below $100 a barrel, as Russia’s invasion of Ukraine juiced energy markets.
The steep losses are a reminder of how Gulf states were burned investing in Western banks and hedge funds during the financial crisis in 2007 and 2008. The value of foreign assets in portfolios of the Gulf Cooperation Council states in 2008 fell by $100 billion to a total of $1.2 trillion, not counting the vast personal holdings of their ruling families, the New York-based Council on Foreign Relations reported in 2009.
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The market:
- ATT, Fortinet, TSMC: no-brainer buys right now. Link to Motley Fool.
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- DIS: more bad news for investors. Link to TheStreet, March 21, 2023.
- Commodities supercycle: Goldman Sachs.
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