Gulf Exporters slowing down on acquistions, until the oil crisis produces more “bargains” later. We suffer, and then they buy us out. Shariah Law at work

“For two years they were on a buying spree. But there is an anticipation by sovereign wealth funds that financial assets will depreciate further as credit turmoil spreads in the West.”

Acquisitions outside of the region by Gulf buyers more than tripled to $89.13 billion last year compared with the year earlier, according to London-based research firm Dealogic.

But buys slowed to $19.8bn in the first quarter, down over 30 percent from the fourth quarter despite some big-ticket deals that helped shore up Wall Street financial institutions.

Growing sovereign fund acquisitions have raised concern among US legislators about foreign influence and control over assets and questions as to whether investments are politically motivated. This may have made Gulf funds more cautious.

Aside from political scrutiny, funds have also taken some pain from their investments and are treading carefully until they get a better idea of whether the credit crisis has hit its nadir.

Citigroup and Merrill Lynch shares have lost about 20 percent each since Kuwait’s sovereign fund and Saudi billionaire Prince Alwaleed bin Talal agreed in January to invest at least $5bn in the US banks.

“After initial forays, they’ve gotten their fingers burnt quite badly,” said Gulf Finance House chief economist Ala’a Al Yousuf.

“It showed that the worst was not over and they were a bit too hasty in buying into these institutions.”

The massive transfer of wealth into the region from higher oil revenues has already unleashed startling economic growth among the Gulf’s core Opec members.

Gulf country economies doubled in size from 2002 to 2006.