Wotka World Wide

Sunday, March 01, 2009

The Abu Dhabi Invest Authority, the largest sovereign fund, is considering its options on its investment in Citigroup. They hold $7.5 billion in bonds, which are due for conversion into common stock at prices over $30 per share early next year. They seem committed to Citigroup, but with Citi stock around $1.50 a share, they are understandably concerned. As are the other major international investors in Citi, Saudia Arabia's Prince Alwaleed and the Government of Singapore Investment Corporation, who combined hold $27.5 billion in bonds that are also due for conversion to common stock.

This uncertainty has led to an undertandable reluctance on the part of sovereign investment funds to make new investments abroad, especially in foreign financial firms, which has increased the uncertainty for organizations like Citigroup. Hence the U.S. government's move to buy up a larger stake in the company to keep it solvent. The big investors seem committed to Citigroup, but everyone else is jumping ship and getting what they can for the stock, which has caused its massive decline. Citigroup is perhaps the most at-risk financial company out there, and their continued struggles will doubtless mirror continued uncertainty in the greater financial markets throughout this year and the next.

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home