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Abu Dhabi says to fund wider 2016 deficit mainly via bond issues

Posted on 25 April 2016 by VRS  |  Email |Print

Abu Dhabi expects to post a wider budget deficit of 36.9 billion dirhams ($10.1 billion) in 2016 because of low oil prices, and plans to cover the gap mainly with international bond issues, a prospectus for a bond sale by the emirate showed.
The prospectus noted that Abu Dhabi’s sovereign wealth fund, the Abu Dhabi Investment Authority, could be directed to pay dividends to the government to help cover any deficit. But it did not say whether this was likely to be done in 2016………………………………………..Full Article: Source

Malaysia’s 1MDB and IPIC in dispute over coming bond payment

Posted on 25 April 2016 by VRS  |  Email |Print

Troubled Malaysian government investment fund 1Malaysia ­Development Bhd must make a $US50 million ($64m) debt payment today as it faces the possibility of a default that could trigger defaults on billions more of its debt.
The overdue payment is on a $US1.75 billion bond issued by 1MDB in late 2012. If the bond is ultimately declared in default, the subsequent fallout could hurt the outstanding debt and the currency of Malaysia………………………………………..Full Article: Source

1MDB bonds rally as fund row stokes volatility

Posted on 21 April 2016 by VRS  |  Email |Print

1Malaysia Development Bhd’s bonds maturing in March 2023 rose, halting a three-day slide on concern the state investment company may default on its debt obligations after a spat with Abu Dhabi’s sovereign wealth fund.
The US$3 billion (RM11.8 billion) 4.4 per cent notes jumped 4.3 cents to 84.3 cents on the dollar to yield 7.36 per cent as of 1:50pm in Hong Kong, according to Bloomberg-compiled prices. The securities slumped 12.4 cents yesterday, the most since at least April 2014. The company’s US$1.75 billion of 5.99 per cent notes due May 2022 fell 3.9 cents to 102 cents yesterday………………………………………..Full Article: Source

Malaysia’s 1MDB bonds rally as fund row stokes volatility

Posted on 20 April 2016 by VRS  |  Email |Print

1Malaysia Development Bhd’s bonds maturing in March 2023 rose, halting a three-day slide on concern the state investment company may default on its debt obligations after a spat with Abu Dhabi’s sovereign wealth fund.
The US$3 billion 4.4 per cent notes jumped 4.3 cents to 84.3 cents on the dollar to yield 7.36 per cent as of 1:50 pm in Hong Kong, according to Bloomberg-compiled prices. The securities slumped 12.4 cents on April 18, the most since at least April 2014. The company’s US$1.75 billion of 5.99 per cent notes due May 2022 fell 3.9 cents to 102 cents Monday………………………………………..Full Article: Source

1MDB risks US$50m default as IPIC refuses to step in

Posted on 19 April 2016 by VRS  |  Email |Print

1MDB is facing the risk of default as Abu Dhabi-owned sovereign wealth fund International Petroleum Investment Company (IPIC) is no longer willing to service bond interest for the Malaysian fund, according to The Straits Times of Singapore.
1MDB has a US$50 million interest payment for its US$3.5 billion bond, which is due tomorrow. “Malaysian government officials, who spoke to The Straits Times on condition of anonymity, said IPIC has informally told 1MDB that it has no intention of honouring the interest payment because of the alleged default of the bond agreement………………………………………..Full Article: Source

Plunge Into Equities Shows Azeri Wealth Fund Playing Catchup

Posted on 15 April 2016 by VRS  |  Email |Print

After diversifying into gold, real estate and Chinese bonds, Azerbaijan’s $33.6 billion wealth fund has some catching up to do with its peers when it comes to equities. This year’s global selloff has done nothing to dissuade the State Oil Fund of Azerbaijan, known as Sofaz, from plans to raise its allocation of equity investments to 15 percent from 10 percent.
That compares with a 60 percent weight allotted to stocks by Norway’s sovereign wealth fund, the world’s biggest. Sofaz had 6.5 percent of its assets invested in equities at end-2014………………………………………..Full Article: Source

Norway’s oil fund doubles investment in Lithuanian government bonds in 2015

Posted on 11 March 2016 by VRS  |  Email |Print

Norway’s government pension fund, which is often referred to as the Norwegian oil fund and is one of the biggest global institutional investors, last year doubled its investment in Lithuania’s government securities but reduced its shareholding in Lithuanian-owned aircraft leasing, management and trading company AviaAM Leasing, Norges Bank Investment Management (NBIM), the manager of the fund, said.
The fund’s investment in Lithuania’s government securities amounted to nearly 1.661 billion Norwegian kroner (EUR 176.8 mln) at the end of 2015, up from 711 million kroner (EUR 75.7 mln) a year before………………………………………..Full Article: Source

SWFs increasingly looking to ETFs for their core portfolio

Posted on 11 March 2016 by VRS  |  Email |Print

Being intergenerational funds and holding no liabilities make sovereign wealth funds (SWFs) the ultimate in long-term investors. With the luxury of time they have the ability to fully benefit from the illiquidity premium historically inherent in many real, actively managed assets.
However, a sea of change sits on the horizon with SWFs increasingly considering ETFs for their core portfolio exposure. Three business drivers lie behind this trend, including insourcing investment capabilities; an SWF equity market discount, and lower for longer oil prices………………………………………..Full Article: Source

Norway sovereign fund sells Japanese government bonds

Posted on 10 March 2016 by VRS  |  Email |Print

Norway’s government pension fund became a seller of Japanese government bonds in the October-December quarter after having built up its holdings until September, a report by the country’s central bank shows.
According to Norges Bank, the fund’s outstanding JGB holdings shrank 13%, or by around 430 billion yen ($3.81 billion), from the end of September to 2.76 trillion yen as of the end of last year. JGBs had accounted for 7.5% of the fund’s bondholdings at the end of September, but the selling pushed the figure down to 6.5%. Proceeds from the JGB sales were reinvested in European and emerging-country bonds………………………………………..Full Article: Source

Kuwait to issue international, domestic bonds

Posted on 09 March 2016 by VRS  |  Email |Print

Kuwait’s government plans to issue both international and domestic bonds to help cover a budget deficit caused by low oil prices, finance minister Anas al-Saleh told Reuters on Tuesday. Saleh told Reuters on the sidelines of a financial conference that the issues would be conducted once government committees had agreed on a plan. He did not give further details.
The ministry projected in January that the government would run a deficit of KD12.2bn (US$40.7bn) in the next fiscal year starting on April 1, nearly 50% higher than the deficit estimated for the current year, after contributions by the government to the sovereign wealth fund………………………………………..Full Article: Source

Sovereign Wealth Funds Among Major Stories for REITs

Posted on 04 March 2016 by VRS  |  Email |Print

The prospects for REITs in 2016 are encouraging, with sovereign wealth funds continuing to invest aggressively in U.S. markets and the Fed’s policy of incremental interest rate hikes signaling confidence in the U.S. economy as a whole.
Although the precipitous decline in oil prices has created headwinds in Houston, especially for multifamily and office sectors, even here, job growth remains positive. In the meantime, REITs are reconfiguring their portfolios to focus on new uses of space in the industrial and office sectors in response to new business models and advances in technology………………………………………..Full Article: Source

Temasek unveils €600m 6-year and €500m 12-year bonds

Posted on 25 February 2016 by VRS  |  Email |Print

They’re due 2022 and 2028, respectively. The investment company has launched both 6-year and 12-year bonds in euros, which will be used to finance its course of business. According to a press release by Temasek Holdings, both issues were oversubscribed, with robust demands from high-quality investors.
“The issues were in response to enquiries from investors about highgrade euro bonds,” said Leong Wai Leng, Temasek’s chief financial officer. “Our Temasek Bonds serve as public markers of our credit quality. They also increase our funding flexibility and enhance our capital efficiency,” Leong said………………………………………..Full Article: Source

Malaysia’s Khazanah issues US$750m sukuk to refinance maturing notes

Posted on 25 February 2016 by VRS  |  Email |Print

Malaysia’s sovereign wealth fund Khazanah Nasional Bhd issued a US$750 million five-year Islamic bond, or sukuk, on Wednesday (Feb 24) to refinance debt from one of its units that is maturing next month.
The fund said the US dollar-denominated straight sukuk was priced at a profit rate of 3.035 per cent. Despite challenging market conditions, it achieved the target size at a spread of 178 basis points over US Treasuries, Khazanah said in a statement. The sukuk attracted demand from financial institutions, asset management companies, statutory bodies and insurance companies, the fund added………………………………………..Full Article: Source

Khazanah and Temasek battle it out for bond investors

Posted on 24 February 2016 by VRS  |  Email |Print

Two of Asia’s rarest quasi-sovereign credits choose the same day to launch landmark bond deals on Tuesday, with a $750 million global sukuk issue from Malaysian sovereign wealth fund Khazanah Nasional Berhad and a €1.1 billion deal from its Singaporean counterpart Temasek.
Both deals were ground breaking transactions in their own right given that Khazanah was bringing its first straight dollar sukuk and Temasek has never issued in euros before. However, some market participants queried why Temasek decided to press the button on its deal knowing that Khazanah was already in the market………………………………………..Full Article: Source

Temasek launches dual tranche Euro bond offering

Posted on 24 February 2016 by VRS  |  Email |Print

Sovereign wealth fund Temasek Holdings intends to launch a dual tranche 6-year and 12-year bond offering under its US$15 billion Guaranteed Global Medium Term Note Program. The notes will be issued by Temasek Financial (I) Limited and will be fully, irrevocably and unconditionally guaranteed by Temasek.
The proceeds from the 6-year T2022-EUR Temasek Bond and a 12-year T2028-EUR Temasek Bond will be provided to Temasek and its investment holding companies to fund their ordinary course of business. Temasek has been assigned an overall corporate credit rating of AAA by Standard & Poor’s Ratings Services and Aaa by Moody’s Investors Service………………………………………..Full Article: Source

Khazanah returns to US$ bond market after 10 years

Posted on 24 February 2016 by VRS  |  Email |Print

Malaysia’s sovereign wealth fund Khazanah Nasional has returned to the US dollar bond market after 10 years. Bloomberg reported on Tuesday the issuer may price the US dollar bench 5Y bond, IPT +190bp area.
It said Khazanah was last in the US dollar market in 2006, when it sold a US$1bil 5.625% that matures on March 15. The wire report said the issuer met investors last month with Barclays, CIMB, MS, UBS. CIMB, DBS, StanChart are joint lead managers………………………………………..Full Article: Source

Appetite for bonds

Posted on 24 February 2016 by VRS  |  Email |Print

Reuters reported that sovereign wealth fund Khazanah is marketing a five-year US-dollar sukuk issuance. The report did not specify the amount that Khazanah intends to raise, but insiders reckon that the sovereign fund could be testing the market to see how much it could raise at rates amenable to it. CIMB, DBS and Standard Chartered are lead managers for the deal.
Going by one estimate, there could be as much as US$20bil (RM84.22bil) being raised by Malaysian entities, including the Government, Khazanah Nasional Bhd, Petroliam Nasional Bhd, Axiata Group Bhd and Telekom Malaysia Bhd, to name a few………………………………………..Full Article: Source

Khazanah bookbuilds for US dollar 5-year sukuk

Posted on 23 February 2016 by VRS  |  Email |Print

Malaysian sovereign wealth fund Khazanah Nasional Berhad is marketing five-year US dollar sukuk in the US Treasuries plus 190bp area. CIMB, DBS and Standard Chartered are lead managers for the deal that is expected to price.
The Reg S senior unsecured bonds will list in Malaysia and Singapore under English and Malaysian law. The sukuk will be issued through Danga Capital Berhad, a special purpose vehicle, with the SWF acting as obligor………………………………………..Full Article: Source

Sovereign wealth funds pull at least $46.5bn from asset managers

Posted on 22 February 2016 by VRS  |  Email |Print

Asset managers suffered record outflows from sovereign wealth funds in 2015 and have been warned to expect even greater redemptions this year as the oil price collapse drives governments to raid their state-owned investment vehicles.
State funds pulled at least $46.5bn from asset managers in 2015 — far greater than the sovereign outflows recorded at the height of the financial crisis — in a bid to prop up their economies, according to figures given exclusively to FTfm by eVestment, the data provider………………………………………..Full Article: Source

Korea: Sovereign fund to increase investments in alternative assets

Posted on 19 February 2016 by VRS  |  Email |Print

The chief of the country’s sovereign wealth fund said Wednesday that he will increase its investments in alternative assets, such as real estate and infrastructure, as stocks are dropping sharply and bonds are yielding lower returns.
Eun Sung-soo, CEO of the Korea Investment Corp. (KIC), said the fund will make alternative investments account for 20 percent of its total investments by 2020, raising them from 12.4 percent last year. “We will increase our portion of alternative investments gradually as they are expected to give more returns in the long term,” said Eun at a luncheon meeting with journalists at the agency’s main office in Seoul………………………………………..Full Article: Source

Norway clears Iran debt purchases by massive govt fund

Posted on 19 February 2016 by VRS  |  Email |Print

Norway said on Thursday it had authorised its pension fund, the world’s largest sovereign wealth fund, to resume Iranian government bond purchases in the wake of a deal phasing out sanctions against Tehran.
The fund, which is worth nearly 7 trillion kroner (€735 billion, $814 billion) and targets a 35-percent share of bonds in its portfolio, had been barred from buying into Iranian debt since January 2014 because of sanctions over Iran’s nuclear programme. North Korea and Syria, also hit by sanctions, remain off limits to the fund. But since a deal on Iran’s nuclear programme, signed in July 2015, economic sanctions against Iran are being phased out, the Norwegian finance ministry noted in a statement………………………………………..Full Article: Source

Norway says its wealth fund can invest in Iranian bonds

Posted on 19 February 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund, the world’s largest, will be allowed to invest in Iranian government bonds following the signing of the Joint Comprehensive Plan of Action by Iran, the Nordic country’s finance ministry said on Thursday.
The fund has not been allowed to invest in government bonds in North Korea, Syria and Iran since January 2014………………………………………..Full Article: Source

UAE federal bonds issue to bolster country’s banks, says Arqaam Capital

Posted on 16 February 2016 by VRS  |  Email |Print

The UAE’s forthcoming fed­eral bond issue is good news for the country’s banks, which have endured falling deposits as government-related entities withdraw cash, said the investment bank Arqaam Capital yesterday in a research note.
“In 2015, the UAE funded its deficit shortfall through the drawdown of government deposits, sale of foreign assets and a credit line from its sovereign wealth fund,” said Jaap Meijer, head of research at Arqaam Capital. The Abu Dhabi government, which is the largest contributor to the federal budget, has a long-standing arrangement with the Abu Dhabi Investment Authority that allows it to withdraw cash from the sovereign wealth fund to fund its deficit………………………………………..Full Article: Source

Future Fund buys government bonds as deflation hedge

Posted on 10 February 2016 by VRS  |  Email |Print

The Future Fund has ramped up its holdings of government bonds as a defence against the risk of global deflation, said managing director David Neal as he explained why the sovereign wealth manager has become “relatively cautious” about the future.
Expressing concern about the “diverging paths” of economies around the world, Mr Neal cautioned that doubts about the pace of US Federal Reserve interest rate hikes and their impact on emerging markets posses “certain risks.”……………………………………….Full Article: Source

SOFAZ refuses to transfer its gold reserves into other assets

Posted on 04 February 2016 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ is not planning to transfer its gold reserves into other assets. SOFAZ buys gold not for the sake of purchase or other speculative purposes but for strategic purposes, the Fund told Report.
The investment strategy of SOFAZ presupposes that up to 5 percent of total cost of investment portfolio may be invested in gold. The amount of SOFAZ gold assets was 30,175 kg or 970,146 troy ounces by late 2015. The Fund further noted that sale of the gold reserves or its replacement with other assets is not in the agenda of SOFAZ………………………………………..Full Article: Source

Sovereign wealth funds drive turbulent trading

Posted on 02 February 2016 by VRS  |  Email |Print

Asset managers have blamed outflows from sovereign wealth funds for one of the worst starts to the year for markets. The collapse in the price of oil resulted in state-backed investment vehicles becoming “forced sellers”. The year began with a sharp drop in equity markets. UK and US stocks fell almost 10 per cent in the first few weeks of 2016 and emerging markets were hit even harder.
Philippe Ferreira, a director at Lyxor Asset Management, the €116bn fund house, said sovereign wealth funds have been driving the turbulent trading conditions. “We know the sovereign wealth funds are under pressure to sell and that is contributing to the market pressure we are seeing,” he said. “Sovereign wealth funds have become forced sellers,” added Guy Monson, chief investment officer of Sarasin & Partners, a UK boutique investment manager………………………………………..Full Article: Source

Sovereign Funds Vs. Asset Managers: The Big Picture

Posted on 29 January 2016 by VRS  |  Email |Print

A number of asset managers who focus on institutional investors such as commodity-based sovereign wealth funds have been ravaged with redemptions. The rapid descent of oil prices flummoxed wealth fund chiefs. In response to the oil glut, the money management spigot for investment managers running listed equity strategies has slowed.
Furthermore, Middle Eastern sovereign funds have been dumping some hedge funds (some shuttered operations), while Canadian asset giants shift more focus toward private credit, real estate and infrastructure investments. However, for some cash-rich sovereign wealth funds like the Abu Dhabi Investment Authority (ADIA), the sustained low price of oil has a negligible effect on their real estate investment activities………………………………………..Full Article: Source

The sovereign wealth ruling class

Posted on 25 January 2016 by VRS  |  Email |Print

It’s always good to have deep pockets, but few institutional investors carry checkbooks backed by entire nations. Yet point to one of New York City’s recent big-ticket real estate deals and there’s a good chance a sovereign wealth fund was one of the buyers.
Through the first 11 months of 2015, sovereign wealth funds spent more than $22.6 billion on real estate in the United States, up from about $9.8 billion in 2014, according to research firm Real Capital Analytics. “If you need billions of dollars for a project, where are you going to go?” said Savills Studley executive managing director Woody Heller, who heads the brokerage’s capital markets group………………………………………..Full Article: Source

Khazanah hits road for US dollar sukuk

Posted on 15 January 2016 by VRS  |  Email |Print

Khazanah Nasional Bhd has mandated Barclays, CIMB, Morgan Stanley and UBS to arrange a series of investor meetings for a US dollar sukuk offering. The roadshow will take place in Dubai on Sunday, Hong Kong on Monday, Singapore on Tuesday and London on Wednesday.
The Reg S offering will be unrated and issued off the Multi-currency Islamic Securities Issuance Programme established by Danga Capital Bhd. Danga Capital is a special purpose financing vehicle initiated by Khazanah, Malaysia’s sovereign wealth fund………………………………………..Full Article: Source

Tender of 10-year Government Bonds on 20 January 2016

Posted on 12 January 2016 by VRS  |  Email |Print

The Hong Kong Monetary Authority (HKMA), as representative of the Hong Kong Special Administrative Region Government (HKSAR Government), announces today (Monday) that a tender of 10-year Government Bonds (Bonds) under the Institutional Bond Issuance Programme will be held on Wednesday, 20 January 2016, for settlement on Thursday, 21 January 2016.
A total of HK$1.8 billion 10-year Bonds will be tendered. The Bonds will mature on 21 January 2026 and will carry interest at the rate of 1.68% per annum payable semi-annually in arrears. Under the Institutional Bond Issuance Programme, tender is open only to Recognized Dealers which are appointed as Primary Dealers………………………………………..Full Article: Source

The Overblown Threat to Money Managers

Posted on 05 January 2016 by VRS  |  Email |Print

The sound of sovereign wealth funds sucking money back home is whistling through the asset management industry. But the direst forecasts for asset managers may be overblown. Sovereign funds have ballooned, from $3.3 trillion in 2007 to $7.2 trillion by the middle of 2015, according to the Sovereign Wealth Fund Institute, a research firm.
At the end of 2014, SWFs — many of them from commodity-rich countries — had $1.9 trillion in equities, $900 billion in fixed income and short-term liquid assets and $400 billion in alternative investments, including real estate, hedge funds and private equity, according to a Bloomberg News report last month based on Moody’s research………………………………………..Full Article: Source

Kuwait sovereign fund postpones sale of subsidiary via IPO

Posted on 04 January 2016 by VRS  |  Email |Print

Kuwait’s sovereign wealth fund is delaying the sale of its holding in Kuwait Investment company (KIC) through an initial public offering due to market conditions, it said in a bourse statement on Thursday.
The Kuwait Investment Authority (KIA), the region’s oldest state fund with an estimated $500 billion (Dh1.83 trillion) in assets, owns 76 per cent of KIC. The KIA’s divestiture in KIC was first announced in late October 2014 and initially slated for the first half of this year, according to a report by Moody’s Investors Service………………………………………..Full Article: Source

IMF Says Ukraine Bond Owned by Russia Is Official Sovereign Debt

Posted on 17 December 2015 by VRS  |  Email |Print

The International Monetary Fund’s executive board ruled that a bond sold by Ukraine to Russia should be considered official sovereign debt, putting pressure on Ukrainian officials to start restructuring talks with their Russian counterparts.
The bond was acquired by and is held by Russia’s National Wealth Fund, an agency acting on behalf of the Russian government, according to a staff paper considered by the board. Russia bought a $3 billion bond from the government of former Ukrainian President Viktor Yanukovych in 2013………………………………………..Full Article: Source

Italian state lender to set up equity fund for family businesses

Posted on 17 December 2015 by VRS  |  Email |Print

State-owned Italian bank Cassa Depositi e Prestiti (CDP) is to set up a private equity fund to help family businesses, but a family business expert questions to what degree it will achieve its aim of helping them go public.
CDP will act as an anchor investor and invite foreign investors and sovereign wealth funds to buy shares in the companies. Professor Alfredo De Massis, director of the Centre for Family Business at Lancaster University says the fund will help business go public, but some might be reluctant to initial public offerings (IPO) due to cultural bias………………………………………..Full Article: Source

Norway oil fund dumps bonds, clearing path to quarterly profit

Posted on 10 December 2015 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund says it has recovered from the losses it suffered in the second and third quarters thanks to a strategy of dumping bonds and buying up stocks and real estate. The fund “has been reducing dramatically” its bond holdings over the past five years, Yngve Slyngstad, its chief executive officer, said.
There is still a “challenging investment environment” ahead of next week’s Federal Reserve decision. But the fund has nonetheless “got everything we lost in the third quarter back in the fourth quarter — so it’s going to be another positive year,” he said………………………………………..Full Article: Source

Alaska SWF Backs New SSgA Smart Beta Funds

Posted on 10 December 2015 by VRS  |  Email |Print

Increasingly, sovereign wealth funds and pensions are embracing the usage of factor-based investing or smart beta. State Street Global Advisors (SSgA) has US$ 81 billion in assets under management when it comes to smart beta offerings. SSgA developed new exchange-traded funds (ETF) with input from the Alaska Permanent Fund Corporation (APFC).
The APFC has been contemplating smart beta strategies for well over a year, according to SWFI Compass - an opportunity tracking service. In return, the AFPC is investing US$ 1 billion across the three new smart beta ETFs. The three ETFs are broken out by yield, momentum and low volatility………………………………………..Full Article: Source

Norway Oil Fund Dumps Bonds, Clearing Path to Quarterly Profit

Posted on 09 December 2015 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund says it has recovered from the losses it suffered in the second and third quarters thanks to a strategy of dumping bonds and buying up stocks and real estate. The fund “has been reducing dramatically” its bond holdings over the past five years, Yngve Slyngstad, its chief executive officer, said in an interview in Paris on Tuesday.
There is still a “challenging investment environment” ahead of next week’s Federal Reserve decision. But the fund has nonetheless “got everything we lost in the third quarter back in the fourth quarter — so it’s going to be another positive year,” he said………………………………………..Full Article: Source

GMR Infra inks Rs 2,000-crore bond deal with Kuwait Investment

Posted on 08 December 2015 by VRS  |  Email |Print

GMR Infrastructure has inked a foreign currency convertible bond private-placement deal with Kuwait Investment Authority (KIA) for $300 million (approximately Rs 2,000 crore). “Kuwait Investment Authority today agreed to subscribe to a sixty-year long Foreign Currency Convertible Bond (FCCB) due 2075 to be issued by GMR, the flagship company of the GMR Group,” GMR Infrastructure said in its filing to the BSE on Friday.
Kuwait Investment Authority is one of the largest and oldest sovereign wealth fund of the world. “This is the largest bilateral investment of Kuwait Investment Authority in India. This investment shows confidence of sovereign investors in the long-term policies being implemented by the Government of India, particularly in the infrastructure space,” said GMR Group’s Chairman G M Rao in the statement………………………………………..Full Article: Source

1MDB Aims To Resolve Debt Issue, Dewan Told

Posted on 27 November 2015 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB) aims to resolve its debt and cashflow problem without the government’s financial assistance, said Deputy Finance Minister Datuk Johari Abdul Ghani. He said the sovereign wealth fund implemented its strategic rationalisation plan early this year to resolve its RM42 billion debt.
“If all the strategic plans are implemented quickly and without any hurdles, it would reduce 1MDB’s debt interest charges,” Johari said when replying to Rantau Panjang MP Siti Zailah Mohd Yusoff in Parliament ……………………………………….Full Article: Source

Elite funds prepare for reflation and a bloodbath for bonds

Posted on 26 November 2015 by VRS  |  Email |Print

The Norwegian Pension Fund, the world’s top sovereign wealth fund, is rotating a chunk of its $860bn of assets into property in London, Paris, Berlin, Milan, New York, San Francisco and now Tokyo and East Asia. “Every real estate investment deal we do is funded by sales of government bonds,” says Yngve Slyngstad, the chief executive.
It already owns part of the Quadrant 3 building on Regent Street, and bought the Pollen Estate - along with Saville Row - from the Church Commissioners last year. But this is just a nibble. The fund is eyeing a 15pc weighting in property, an inflation-hedge if ever there was one………………………………………..Full Article: Source

Norway Wealth Fund Backs Push to End Banks’ Dominance Over Bonds

Posted on 23 November 2015 by VRS  |  Email |Print

The world’s largest sovereign investor wants to curtail the big banks’ hold over bond trading. The $860 billion Norwegian sovereign-wealth fund is backing the European Union’s campaign to bring transparency to the bond market and make debt trade more like stocks.
The fund says the current setup — where investors call a bank to get a price — is dysfunctional and should be fixed by forcing the banks to publish their prices. The fund will make reform of Europe’s debt markets one of its priorities, according to Oeyvind Schanke, its chief investment officer for asset strategies. It’s easy to see why………………………………………..Full Article: Source

Kazakhstan plans IPOs for 43 large state firms in 2016-17

Posted on 19 November 2015 by VRS  |  Email |Print

Kazakhstan plans to sell stakes of at least 25 percent in 43 large state-owned companies via initial public offerings (IPOs) in 2016-17, the Samruk-Kazyna sovereign wealth fund said. The government faces a plunge in revenues from oil, Kazakhstan’s main export. President Nursultan Nazarbayev told a government meeting on Wednesday he wanted Kazakh businessmen and companies to take part in the privatisations.
The stakes will be sold on the floor of the oil-rich nation’s financial centre being built in the capital Astana, the fund said. The businesses to go public include oil and gas company KazMunaiGas, uranium company Kazatomprom, railway company Kazakhstan Temir Zholy and mining firm Tau-ken Samruk, it said……………………………………..Full Article: Source

Saudi aims for first foreign bond as soon as next year

Posted on 11 November 2015 by VRS  |  Email |Print

Saudi Arabia aims to start selling bonds in the international market as soon as next year as it seeks new ways to cover a budget deficit caused by low oil prices, banking industry sources said on Tuesday. The sources, who have been discussing the matter with officials in the central bank, the Saudi Arabian Monetary Agency (SAMA), said authorities had not yet finalised the plan but were making progress.
“If it’s going to be January, June or 2017, I’m not sure,” said a senior Gulf banker, declining to be named because of commercial sensitivities. “But it’s something that’s top of their minds.” A Saudi commercial banker said bankers were pitching to both the finance ministry and SAMA………………………………………..Full Article: Source

Norway’s Wealth Fund Targets Major Cities After Bonds Hit Zero

Posted on 09 November 2015 by VRS  |  Email |Print

Relentless monetary easing across the rich world is driving the biggest sovereign wealth fund away from debt markets as it instead targets real estate investments in mega cities. Chief Executive Officer Yngve Slyngstad says the meager returns bonds offer mean the $860 billion wealth fund needs to look elsewhere to meet its 4 percent return target.
At the same time, a study published on Friday by the fund shows there’s an argument for tripling its real estate investment to 15 percent of the total portfolio. Lars Dahl, chief risk officer for real estate at the wealth fund, says the best property to invest in now is to be found in the world’s biggest cities………………………………………..Full Article: Source

Norway’s $860 billion wealth fund selling foreign bonds to buy property - CEO

Posted on 09 November 2015 by VRS  |  Email |Print

Norway’s $860-billion (566.47 billion pounds) sovereign wealth fund is funding all its real estate deals by selling government bonds from its portfolio of foreign fixed income assets, its chief executive said on Friday.
“Every real estate investment deal we do is funded by sales of government bonds,” Yngve Slyngstad told a seminar on real estate investments held at the Norwegian central bank………………………………………..Full Article: Source

Old School Asset Managers, Meet New SWFs

Posted on 04 November 2015 by VRS  |  Email |Print

Some of the world’s largest investors, including sovereign wealth funds (SWFs), have brought asset management in house in recent years, putting pressure on external managers’ revenues. However, newly established sovereign wealth funds (SWFs) still require help accessing traditional investment strategies and mainstream asset classes, according to Cerulli Associates.
The company cited Nigeria’s planned trio of SWFs: “It is likely that much of that [work] will need the assistance of external managers,” said Barbara Wall, Europe research director. Saudi Arabia has reportedly begun work on a second wealth fund, while Papua New Guinea, Mexico, Angola, Bangladesh, and Egypt are all at various stages of launching their own SWFs. Wall said such funds could be “lucrative sources of outsourcing mandates in their early years.”……………………………………….Full Article: Source

Jumbo IPO attracts Temasek arm

Posted on 29 October 2015 by VRS  |  Email |Print

Seafood restaurant chain Jumbo Group has attracted an arm of Temasek Holdings and the founder of Asia’s biggest massage-chair maker OSIM as cornerstone investors for its S$40 million initial public offering here.
Jumbo is seeking a listing on the Catalist board, with trading expected to commence on Nov 9, it said today (Oct 28). An offering that size would be the biggest initial share sale this year in Singapore, data compiled by Bloomberg shows. Jumbo is selling 88.2 million new shares at S$0.25 apiece in order to raise capital as it seeks to open at least four new F&B outlets in China and Singapore during the next two years………………………………………..Full Article: Source

Top sovereign funds came in as anchor investors for IndiGo IPO

Posted on 28 October 2015 by VRS  |  Email |Print

Sovereign funds of Norway, Singapore and Kuwait are among the anchor investors who put money in InterGlobe Aviation Ltd, which runs India’s top air carrier IndiGo, on the eve of the firm opening its maiden public issue.
Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund; Singapore’s GIC, and Kuwait Investment Authority together put in Rs 113 crore ($17 million) as part of the Rs 832 crore that IndiGo raised through anchor investors. GIC and the Norwegian fund are two of the most active sovereign funds in Indian public equities………………………………………..Full Article: Source

Malaysian bonds bounce back as 1MDB fears fade

Posted on 28 October 2015 by VRS  |  Email |Print

Malaysia’s bonds are showing signs of stability, heating up the debate on when to pile back into Asia’s worst-performing debt. Malaysia’ corporate dollar-denominated notes have returned 1.5% this month, paring their losses for the year to 1.7%, the biggest on a JPMorgan Chase & Co index.
The cost of insuring the nation’s sovereign debt has fallen the most in four years in October, while the ringgit has rallied 3.2% after a decline of 20% in the first nine months………………………………………..Full Article: Source

Malaysian bonds bounce back as 1MDB fears fade

Posted on 27 October 2015 by VRS  |  Email |Print

A potential rating cut is still deterring investors, according to Jonathan Lemco, senior sovereign analyst and principal at Vanguard, which runs the world’s biggest bond fund. Fitch Ratings earlier this year pointed at the possibility as Malaysia’s trade balance worsened and amid concerns related to 1Malaysia Development Bhd., a sovereign wealth fund at the center of a political scandal that has prompted street demonstrations calling for Najib’s resignation.
The downgrade threat has since lessened after Fitch changed the outlook for the nation’s credit score to ‘stable’ from ‘negative’ on June 30. Among the reasons were improved fiscal finances and the fact that even the current-account surplus is above the median of nations with a similar A- rating to Malaysia’s, it said………………………………………..Full Article: Source

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