Gulf oil producers are likely to deploy about $430 billion of new investments into assets in the region and China over the next two years as they face global financial turmoil, a Saudi bank said yesterday.

Saudi Arabia and its five neighbours in the world's biggest oil-exporting region have acquired about $912bn of foreign assets in the five years to June - including about $450bn in US assets, Samba said in a research note, according to a report in our sister newspaper Gulf Daily News.

Expecting oil prices to average $60 a barrel next year, Samba said the Gulf would have $430bn to spend on foreign assets from June this year and June 2010, with the investment strategy of governments and sovereign wealth funds poised to shift.

'The most recent and intensive period of market turmoil, when a number of major bank failures and bailouts rocked global money and equity markets, is likely to colour the short-term thinking of Gulf fund managers,' Samba said.

'Countries that are less integrated into the global financial system are ... likely become more appealing,' it said, citing the Middle East and North Africa (Mena), as well as China as potentially attractive investment destinations.

The region, which made export earnings of 2.2 trillion in the five years to June, invested about $120bn in the Mena region and Turkey over the same period and about $200bn in Europe, Samba said.-TradeArabia News Service