U.A.E. Central Banker Says SWF Withdrawal Reports `Overblown'

(Bloomberg) -- Khalifa Al Kindi, chairman of the United Arab Emirates central bank, said that media coverage of withdrawals by sovereign wealth funds has been exaggerated, amid investor concern that the funds are pressuring global stock markets.

“I think it’s overblown,” Al Kindi, who is also founder of the Abu Dhabi Investment Council, said Wednesday at a conference in the city. “We have been exposed to that in the 80s and early 90s and now with the oil price at these levels you will be using your SWF to withdrawn from.  We still have a long way before borrowing from outside world. ”

Sovereign funds from Qatar to the U.A.E. and Russia, which amassed about $7 trillion of assets as oil soared higher than $100 a barrel, are liquidating investments after a more than 70 percent slump in crude since 2014. During the boom, oil countries led a surge in investments in the U.S. and Europe, buying stakes in companies such as Barclays Plc.

Jean-Paul Villain, director of the strategy unit at Abu Dhabi Investment Authority, also downplayed the role of sovereign wealth funds in the recent stock market volatility.

“When commentators are suggesting SWFs are responsible for volatility in the market, I’m not sure,” he said at the same conference. “If you are a long-term investor and have long term strategy, if you see prices falling you should buy. And if an asset class is rising you should probably reduce your exposure.”

The fund has always included the volatility of oil prices in its investment strategy, Villain said.

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