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By Ulf Laessing

KUWAIT, Jan 8 (Reuters) - Global Investment House (GLOB.KW: Quote, Profile, Research), Kuwait's biggest investment bank, defaulted on most of its debt, in the first of several expected casualties among financial firms in the wealthy oil producer due to the credit crunch.

The news is a blow to Kuwait's efforts to restore confidence among investors after it recently rescued its fourth-largest lender, Gulf Bank (GBKK.KW: Quote, Profile, Research), which was hit by huge derivative losses, and guaranteed deposits at all banks.

Analysts expect no general government bailout for the investment firms, which make up more than half of the country's listed firms and offer typical investment banking services, after the central bank governor said earlier this week some of them were in trouble due to the global credit crunch.

Some local banks have been heavily lending to such investments firms in the past, analysts say.

"The company is in default on the majority of its financial indebtedness," Global said in a statement to the London Stock Exchange, where it has a listing for Global Depository Receipts (GDR).

Global shares fell 7 percent, dragging down the Kuwait stock market, which dived 38 percent in 2008.

The bank said, without elaborating, that it would continue to service all its interest and coupon payments "on a timely basis". It has appointed HSBC (HSBA.L: Quote, Profile, Research) and Kuwait's CBK Capital (CBKK.KW: Quote, Profile, Research) to hold talks with creditors.