Regional SWFs' global role to continue

The region's sovereign wealth funds may have incurred substantial losses due to the crisis but the funds will remain influential in capital markets.

According to the IMF, despite their losses and greater domestic focus, SWFs' relative size and influence in the global market will remain large. They are also likely to continue to maintain a longer-term investment strategy than most other investors.

"SWFs have a long-term role to play," Masood Ahmed, Director of the IMF's Middle East and Central Asia Department told Emirates Business. "Some of them are using small amount to invest in domestic markets but in the long run they have a well-defined mandate and purpose, which they are pursuing and should be pursued. I don't see that being diverted away."