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Make that two positive data points for the markets and the international financial system on Wednesday.

Shortly after word broke that regulators at the New York State Insurance Department met Wednesday with U.S. banks to discuss raising new capital for bond insurers, Saudi Arabia announced that it plans to start its first sovereign wealth fund with about $6 billion, Bloomberg News reported Wednesday.

Saudi Arabia, the world's largest oil producer and holder of proven oil reserves, said the new fund would probably invest primarily in equities, Bloomberg News reported.

Petrodollar wealth

Like many Persian Gulf states, and other oil producers, Saudi Arabia has seen a surge in petrodollars amid oil's more-than-80% increase in price during the past three years. Most analysts say Saudi Arabia can pump oil profitably for about $3-$5 per barrel. Oil closed Wednesday down $2.22 to $86.99 on renewed concerns of moderating oil demand growth, due to the likely U.S. economic slowdown.

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Saudi Arabia discloses plans for its first sovereign wealth fund originally appeared on BloggingStocks on Thu, 24 Jan 2008 08:44:00 EST. Please see our terms for use of feeds.

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