Monday, 7 December 2009

Why Kuwait is right to sell out of Citigroup (Re-post)

The Kuwait Investment Authority has dumped all its stock in Citigroup chalking up a $1.1 billion profit from the sale. The investment was originally made in preferred stocks in January 2008 for $4.1 billion.

Kuwait’s sovereign wealth fund has clearly had a rough ride as a shareholder since then. The global financial crisis crunched Citi stock to below $1, and its bounce back since then is clearly a welcome relief to shareholders.

Exit timing

But having stayed this course the obvious question is why cash in your chips now. The KIA is the ultimate in long-term shareholders and can take a view over decades not months or years. No doubt the KIA has done its analysis well.

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