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Sovereign Wealth Funds Briefing - Category | Fund Profile/New Launches more

Demand for oil fund as England gets fracking cash

Posted on 05 December 2014 by VRS  |  Email |Print

The Scottish Government last night renewed calls for a sovereign wealth fund to be set up for North Sea oil and gas, after Chancellor George Osborne unveiled a scheme for the north of England to benefit from fracking revenues.
Energy minister Fergus Ewing branded Mr Osborne’s decision “utter hypocrisy” after calls for a similar scheme for Scotland has been repeatedly rejected by Westminster governments. Stuart Patrick, chief executive of Glasgow Chambers of Commerce, also called for a similar fund to be launched for the Central Belt and future projects relating to the “unconventional” extraction of gas………………………………………..Full Article: Source

Autumn Statement: Chancellor to establish sovereign wealth fund for the North of England with shale gas cash

Posted on 04 December 2014 by VRS  |  Email |Print

Chancellor of the Exchequer George Osborne has used his Autumn Statement to confirm plans for a new sovereign wealth fund for the North of England. Speaking to a packed House of Commons the Chancellor said the new fund would use tax receipts from the exploitation of shale gas reserves in the North of England to invest in economic development projects in the region.
The new fund is the latest in a series of government announcements designed to create a Northern Powerhouse economy in the North of England. The measures are designed to re-balance the British economy away from its over-dependence on London and the South East………………………………………..Full Article: Source

Osborne plans ‘fracking fund’ for the North

Posted on 04 December 2014 by VRS  |  Email |Print

The government will create a sovereign wealth fund for the North of England so that shale gas revenues in the region can be used to invest in its own economic growth, George Osborne has announced. Setting out the proposal as part of Autumn Statement measures to create what he calls a Northern Powerhouse, the chancellor also confirmed a £250m investment to create an institute for advanced material science in Manchester.
The new Sir Henry Royce Institute would also have branches in Leeds, Liverpool and Sheffield. Osborne also confirmed the government would tender for new operators for the Northern Rail and the Trans-Pennine Express rail franchises in the region. These contracts would specify the replacement of the unpopular Pacer trains………………………………………..Full Article: Source

Fracking fund for North is ‘fantastic opportunity’, say business chiefs

Posted on 04 December 2014 by VRS  |  Email |Print

Government plans to use income from controversial fracking to boost the North of England economy are a “fantastic opportunity”, say business leaders. However, environmental campaigners claimed the Chancellor was taking the country in the wrong direction by showing its support for shale gas by creating a sovereign wealth fund.
George Osborne used Wednesday’s Autumn Statement to reveal plans to invest shale gas tax revenues in the fund when commercial production begins. Full details have not been confirmed, but it is understood revenues raised by gas in the North would be spent on boosting the North’s economy………………………………………..Full Article: Source

Faint praise for national shale gas fund as critics say it comes too late

Posted on 04 December 2014 by VRS  |  Email |Print

The announcement of a new Sovereign Wealth Fund for the North to invest money from shale gas has been hailed by experts as a great idea – though critics say it comes several decades too late and that it is by no means certain there will be a big shale bounty.
George Osborne said he wanted to make sure ‘that the shale gas resources of the North are used to invest in the future of the North’. Optimists believe the UK is sitting on substantial resources that could see a re-run of the North Sea boom, though opponents claim fracking risks blighting beautiful countryside, polluting the water and causing minor earthquakes………………………………………..Full Article: Source

Looking beyond Sovereign Wealth Fund

Posted on 24 November 2014 by VRS  |  Email |Print

A Sovereign Wealth Fund (SWF) is a special purpose investment fund that is owned by the government. In general, these funds hold financial assets such as stocks, bonds, property or precious metals.
Around the globe, SWFs have been created to achieve savings, development, reserve investments and stabilisation roles at national level. Savings and stabilisation funds have been more prevalent where the former is created to build up savings for future generations while the latter helps to reduce the volatility of government revenues…………………………………..Full Article: Source

A Sovereign Wealth Fund For The Eurozone?

Posted on 20 November 2014 by VRS  |  Email |Print

Social Europe Journal has just published its latest Research Essay “Public Capital in the 21st Century” by Giacomo Corneo. The main argument of the paper is that the state should become a kind of investment state in order to make sure that high returns on capital do not further increase inequality but benefit the wider public.
To achieve this, Corneo argues that governments should set up sovereign wealth funds to manage their investments and take advantage of low interest rates on sovereign bonds as investments should be debt-financed. Having read the paper I was wondering whether this would also be an option to create the much-touted fiscal capacity for the Eurozone. Such a mechanism wouldn’t need Eurozone taxes or tax harmonisation (although both would be desirable) and does not require an open-ended commitment to joint debt……………………………….Full Article: Source

Analysts dim on Zim’s new state fund

Posted on 18 November 2014 by VRS  |  Email |Print

The Zimbabwean Sovereign Wealth Fund (SWF) funded from mineral royalties will not work unless President Robert Mugabe’s Zanu PF-led government addresses poor confidence in the country’s economy, declining foreign direct investments as well as a woeful budget position, experts told Business Report on Friday.
The political uncertainty emanating from fights to take over from Mugabe have added to investor worries in the country. Lack of investments, coupled with a flat-lining economy characterised by a continued decline in productivity and rising imports has seen most companies and businesses battle to stay afloat………………………………..Full Article: Source

SNB head says no sovereign fund for gold if referendum passes: paper

Posted on 17 November 2014 by VRS  |  Email |Print

The chairman of the Swiss central bank ruled out creating a sovereign wealth fund to manage Switzerland’s gold reserves if a referendum on banning the bank from selling them passes, according to a newspaper interview published on Sunday.
The “Save our Swiss gold” proposal, spearheaded by the right-wing Swiss People’s Party (SVP), will be put to a plebiscite on Nov 30. It aims to ban the central bank from offloading the reserves and oblige it to hold at least 20 percent of its assets in gold………………………………….Full Article: Source

UK mulls shale gas fund to avoid ’squandering’ revenue

Posted on 14 November 2014 by VRS  |  Email |Print

The UK is considering setting up a wealth fund from the proceeds of the fracking industry. Communities would benefit, but many question whether fossil fuels like shale gas are the way forward.
In January this year, British Prime Minister David Cameron said the UK was “going all out for shale,” as the country’s oil and gas operations in the North Sea age, with Britain becoming a net importer of oil and gas again in the mid-2000s. The government has therefore set its sights on shale gas, which has seen a boom in the US. In Europe, it is controversial due to environmental concerns…………………………………..Full Article: Source

Zim mine royalties put into new fund

Posted on 14 November 2014 by VRS  |  Email |Print

Zimbabwe’ Treasury is to put a quarter of the country’s mining royalties into a new sovereign wealth fund, which will be managed by the central bank. Several oil-rich African countries such as Algeria and Nigeria have sovereign wealth funds. Zimbabwe is desperate to renew its infrastructure, which includes electricity-generating plants, roads, rail and water treatment facilities neglected for the last 20 years.
According to new laws signed by President Robert Mugabe this week, and seen by online financial publishers, The Source, every withdrawal from the fund must be approved by parliament and be accounted for, and proceeds from the fund may not be used as collateral for credit to government and public enterprises…………………………………..Full Article: Source

Zimbabwe: Sovereign Wealth Fund Act Takes Effect

Posted on 13 November 2014 by VRS  |  Email |Print

Legislation to establish the Sovereign Wealth Fund is now in place following the gazetting of the Sovereign Wealth Fund Act on Monday, a landmark development which seeks to establish a facility whose objective is to reserve income from the country’s finite mineral resources for the benefit of future generations.
The fund will be driven primarily by 25 percent of all royalties on mineral exports, which will be deposited, along with special dividends on the sales of diamonds, gas, granite and other minerals through the Zimbabwe Mining Development Corporation. The Reserve Bank of Zimbabwe will be the primary custodian of the fund………………………………………..Full Article: Source

Mugabe signs Sovereign Wealth Fund bill

Posted on 13 November 2014 by VRS  |  Email |Print

The Treasury will, with immediate effect, remit a quarter of mining royalties to the Sovereign Wealth Fund (SWF) after President Robert Mugabe on Monday signed into law a bill to set up the fund, which is meant to secure investments for future generations and support economic growth.
A sovereign wealth fund is a state-managed pool of money drawn from the country’s reserves, set aside for investment in strategic areas that benefit the economy and its citizens. Funding for sovereign wealth funds is typically accumulated from revenues generated from the export of a country’s natural resources, such as minerals………………………………………..Full Article: Source

Osborne poised to take up the ConHome manifesto proposal for a Sovereign Wealth Fund

Posted on 13 November 2014 by VRS  |  Email |Print

In the ConservativeHome manifesto, we proposed “the creation of a UK Sovereign Wealth Fund into which all new public windfall revenues – for instance, the tax revenues from offshore gas and oil extraction – would be paid”.
Bang on cue, the Daily Mail reports that the Government “is preparing to announce plans for a sovereign wealth fund to hold the revenues from fracking for the north of England”. The news comes via Matthew Hancock, who is to make a speech today announcing the creation of a new National College for Onshore Oil and Gas………………………………………..Full Article: Source

If the UK has to have a shale gas sovereign wealth fund, it needs to do better than this

Posted on 12 November 2014 by VRS  |  Email |Print

The government’s plans for a shale gas sovereign wealth fund lack the firm commitment to decarbonisation that is required. It is a case of better late than never, I suppose. Several decades after Norway channelled the country’s oil and gas wealth towards a sovereign wealth fund that transformed a relatively impoverished northern European nation into one of the world’s richest and most developed countries, the UK has indicated that it might have finally learnt the importance of finding a productive long term use for a lucky windfall.
Set against the context of the UK’s scandalous decision to burn through its North Sea oil and gas wealth twice over - once to release climate changing gases and a second time by diverting the proceeds into Thatcher’s election buying housing booms and tax cuts- this week’s announcement Ministers are planning a shale gas sovereign wealth fund is to be welcomed………………………………………..Full Article: Source

Zimbabwe’s Sovereign Wealth Fund put into gear

Posted on 12 November 2014 by VRS  |  Email |Print

Zimbabwe’s Treasury will with immediate effect remit a quarter of mining royalties to the Sovereign Wealth Fund (SWF) after President Robert Mugabe yesterday signed into law a bill to set up the fund, which is meant to secure investments for future generations and support economic growth.
A sovereign wealth fund is a state-managed pool of money drawn from the country’s reserves, set aside for investment in strategic areas that benefit the economy and its citizens. Funding for sovereign wealth funds is typically accumulated from revenues generated from the export of a country’s natural resources, such as minerals………………………………………..Full Article: Source

Timor-Leste Oil fund worth US$16.6 billion in September

Posted on 12 November 2014 by VRS  |  Email |Print

The value of the Timor-Leste (East Timor) Oil Fund increased by just US$177 million in the third quarter due to payments to the state budget, the Timor-Leste Central Bank said Monday in Dili. According to the statement issued in Dili, the value of the Oil Fund was US$16.6 billion at the end of September.
From July to September the Fund recorded US$522.35 million of gross inflows in contributions and royalties, and outputs amounted to US$345.35 million, including US$340 million in the form of transfers to the state budget. The Timor-Leste Oil Fund, which was created in August 2005, receives all the state’s revenues from oil exploration………………………………………..Full Article: Source

UK lawmakers to consider shale gas sovereign wealth fund

Posted on 11 November 2014 by VRS  |  Email |Print

Britain’s upper house of parliament will on Monday consider plans for a sovereign wealth fund to be set up with revenues raised from shale gas, a source of energy which the government hopes will offset the decline of output from the North Sea.
As part of discussions about legislation on infrastructure, the House of Lords will debate a government plan announced over the weekend to create a fund with money raised from shale gas — once production of this gas trapped in rocks beneath the ground starts towards the end of the decade………………………………………..Full Article: Source

Decc announces plans for sovereign wealth fund based on shale gas

Posted on 11 November 2014 by VRS  |  Email |Print

The UK Department of Energy and Climate Change (Decc) has announced plans to set up a state-owned investment fund with future revenues from the extraction of shale gas. Launched with the support of Her Majesty’s Treasury, the sovereign wealth fund will be put in place when commercial production begins in order to ensure profits from national gas last for generations and benefit the whole country.
Energy secretary Ed Davey explained: “The sovereign wealth fund is about storing the financial benefits of shale production and putting it towards a low-carbon energy future. This is part of a broader strategy to strengthen the UK’s security of supply in a cost-effective way for future generations.” Energy and business minister Matthew Hancock added: “It’s clear – domestic gas is good for business, energy security and the whole of the UK.”……………………………………….Full Article: Source

UK proposes shale gas sovereign wealth fund

Posted on 11 November 2014 by VRS  |  Email |Print

George Osborne says money from shale gas production could create fund for north of England. A plan for new shale gas tax revenues to be deployed in a UK sovereign wealth fund is to be debated in the House of Lords on Monday.
Energy and climate change secretary Ed Davey said over the weekend that the proposed fund would be set up once commercial production of shale gas begins. “It’s about storing the financial benefits of shale production and putting it towards a low-carbon energy future,” he added. “It’s part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for future generations.”……………………………………….Full Article: Source

Britain to establish a sovereign wealth fund

Posted on 10 November 2014 by VRS  |  Email |Print

The British government said on Saturday that it would establish a sovereign wealth fund with the proceeds from extracting natural gas from shale. The announcement, which may be seen as premature because no shale gas production is likely to occur in the near future, is another step by the government of Prime Minister David Cameron to encourage development of a shale gas industry and overcome public opposition to hydraulic fracturing, or fracking.
Edward Davey, the energy minister, said in a statement that the sovereign wealth fund “was part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for generations.” Oil-producing countries like Norway and Kuwait, as well as the emirate of Abu Dhabi, have built up large sovereign wealth funds intended to save and invest the proceeds from the extraction of fossil fuels for future generations………………………………………..Full Article: Source

Setting up a sovereign wealth fund would let future generations benefit from gas profits

Posted on 10 November 2014 by VRS  |  Email |Print

The natural assets of a country are, in part, infinite – the sunshine, rain, wind or wave power. But others are finite, for example the coal that powered Britain’s industrial revolution and for a time made this country the workshop of the world. Another lucky beneficiary of oil and gas is Norway. But after a fierce debate, that country took an alternative approach and created a sovereign wealth fund to invest the proceeds from its resource.
In about 20 years, the Norwegian sovereign wealth fund has reached more than $800 billion (£500 billion) and gives the people of Norway an annual income of £20 billion to £25 billion. The fund now owns 1.3 per cent of the entire world’s listed companies. Because of the limits placed on annual distributions from the fund, there is every chance that it will operate for a long time into the future………………………………………..Full Article: Source

Shale gas: George Osborne proposes north of England fund

Posted on 10 November 2014 by VRS  |  Email |Print

Shale gas extraction revenues could be held in a “sovereign wealth fund” for the north of England, the chancellor has said. George Osborne told BBC Radio 4’s Today programme the fund would be a way of “making sure money is not squandered on day-to-day spending”.
Friends of the Earth’s Helen Rimmer said it was “a desperate attempt to win over communities”. The idea will be discussed in the House of Lords on Monday. Possible sites for the extraction of shale gas have been identified across the north of England, with test drilling licences granted in Lancashire, Cheshire, Merseyside and Greater Manchester………………………………………..Full Article: Source

Australia missed a chance to set up wealth funds, says Asciano chairman

Posted on 10 November 2014 by VRS  |  Email |Print

ASCIANO chairman and BHP Billiton director Malcolm Broomhead says Australia to some extent wasted the decade-long commodities boom by failing to establish a sovereign-wealth fund and follow the likes of Norway. But the resources industry veteran says a fund is still needed to tackle looming demographic changes and that industry cost structures need to change to be able to establish one.
Mr Broomhead, speaking after a recent Australian Futures Project panel session at La Trobe University in Melbourne, said Australia had been through a “decade of decadence”. “We’ve ended up with the highest cost structure, albeit with the highest standard of living in the world, making it twice as expensive to stevedore a ship here as it is in New Zealand,” he told The Australian………………………………………..Full Article: Source

Super Fund defends investment policy

Posted on 04 November 2014 by VRS  |  Email |Print

The New Zealand Superannuation Fund is defending its investment decisions, saying it is putting more money than ever into domestic investments. A Singapore government fund has struck a multi-million dollar deal for a stake in buildings on Auckland’s waterfront, prompting the Property Council to suggest the Superannuation Fund’s focus is offshore and IT should invest more in domestic commercial property.
But the Fund says the amount it has invested in New Zealand grew from $2.4 billion in 2009 to $3.8 billion in September. It says it has a highly disciplined approach to selecting the best investment opportunities for its purpose, which is to maximise long-term returns without undue risk………………………………………..Full Article: Source

Who is behind Bridge Partners, PKR lawmaker asks of firm appointed to manage 1MDB funds

Posted on 04 November 2014 by VRS  |  Email |Print

A lawmaker has raised questions over 1Malaysia Development Bhd (1MDB) move to appoint a little-known Hong Kong based firm to manage its US$2.3 billion, or RM7.4 billion, funds.
Rafizi Ramli (PKR - Pandan) said the sovereign fund’s move to appoint Bridge Partners raised eyebrows, as very little information is known about the company. “This is a pertinent matter because RM7.4 billion worth of public money is managed by a company not subjected to our laws……………………………………….Full Article: Source

Time govt rolls out own Sovereign Wealth Fund

Posted on 04 November 2014 by VRS  |  Email |Print

There has been a significant increase in the number of sovereign wealth funds (SWFs), especially in Africa over the last decade. An SWF is a state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets.
There are currently 51 SWFs with combined assets in excess of US$4 trillion. The Abu Dhabi Investment Authority (Adia) is the largest SWF with assets in excess of US$620 billion. Adia was established in 1976 to manage excess earnings from the oil sector………………………………………..Full Article: Source

Tanzania: Govt to establish natural resource Fund

Posted on 27 October 2014 by VRS  |  Email |Print

To ensure that ongoing gas exploration and subsequent planned production benefits the country, the Ministry of Energy and Minerals is to create a Sovereign Wealth Fund (SWF) that will serve as a catalyst for future national development projects fueled by the gas and oil sectors.
Addressing stakeholders at the Tanzania Oil and Gas Conference and Exhibition (TOGACE) mid week in Dar es Salaam, Deputy Minister Masele also announced plans to table a bill in parliament geared at controlling expenditure of revenue collected from natural resources. The Deputy Minister warned that Tanzania may suffer an economic recession should it commit itself to gas production expenditures instead of development projects………………………………………..Full Article: Source

Tanzania: Special fund to cater for natural resource earnings

Posted on 24 October 2014 by VRS  |  Email |Print

The government is planning to establish an investment fund, Sovereign Wealth Fund (SWF), to serve as a catalyst for national development by diversifying the economy through the use of revenues from such natural resources as oil and gas. Deputy Energy and Minerals Minister Stephen Masele said in Dar es Salaam on Wednesday that the ministry would introduce a motion on SWF Act in the upcoming National Assembly session in November.
“The fund will be used to control expenditure of the revenues collected from natural resources, including oil and gas,” said Mr Masele during a Tanzania Oil and Gas Conference and Exhibitions (TOGaCE)………………………………………..Full Article: Source

Tory Peer Proposes Sovereign Wealth Fund Amendment to UK Infrastructure Bill

Posted on 24 October 2014 by VRS  |  Email |Print

Lord Hodgson of Astley Abbotts, a Tory peer, proposed an amendment to the UK infrastructure bill. In it, Hodgson entails the formation of a soverign wealth fund being funded by shale gas revenue. Hydraulic fracturing, also known as fracking, could provide the UK with a boom in energy revenue.
According to the Associated Press (AP), Lord Hodgson issued the following statement:“You could argue this is akin to an everlasting pension fund for UK plc. Norway has an extremely successful sovereign wealth fund and as a result Norwegian government bonds are some of the most sought after and highly rated in the world. A British sovereign wealth fund might not just help the country in the long run, it might also improve our financial stability in the short run”……………………………………….Full Article: Source

Zambia needs wealth fund

Posted on 22 October 2014 by VRS  |  Email |Print

In the 2015 national budget Government, through the Ministry of Finance, has set aside K100 million towards the creation of a sovereign wealth fund. Minister of Finance Alexander Chikwanda has proposed that the fund be housed by Zambia’s nascent investment vehicle, the Industrial Development Corporation (IDC).
The Bank of Zambia (BoZ) has, however, suggested that it houses the fund. Deputy Governor for Administration Mabula Kankasa recently said the central bank has taken this position after studying a number of sovereign wealth funds around the world………………………………………..Full Article: Source

1MDB not national sovereign wealth fund? What is it, then?

Posted on 17 October 2014 by VRS  |  Email |Print

Prime Minister Datuk Seri Najib Razak’s controversial pet cash cow spin, 1Malaysia Development Berhad (1MDB), has denied that it is the country’s second national Sovereign Wealth Fund (SWF), after Khazanah Nasional. In an Oct 9 posting on its webpage titled “Frequently asked questions (FAQ) about 1MDB”, it reiterated that 1MDB was a strategic development company, wholly owned by the federal government, specifically the Finance Ministry.
So, 1MDB belongs to the government, rakyat and Malaysia, right? But it is not a SWF?Well, then let’s make way for 1MDB, initially set up as the Terengganu Investment Authority in 2009, to split hairs on what it really is………………………………………..Full Article: Source

Sovereign wealth fund should sit at BoZ-Deputy Governor

Posted on 17 October 2014 by VRS  |  Email |Print

The Bank of Zambia has suggested that the proposed setting up of a sovereign wealth fund should be housed at the central bank. Finance Minister Alexander Chikwanda announced during the budget presentation that K100 million was allocated for the establishment of a sovereign wealth fund and suggested that the fund will be housed under the Industrial Development Corporation.
But Bank of Zambia Deputy Governor for Administration Dr Mabula Kankasa said it would be prudent if the fund was managed by the central bank. She was speaking on Wednesday when she led a team from the Bank of Zambia in making a presentation to the Expanded Estimates Committee on the 2015 national budget at Parliament buildings………………………………………..Full Article: Source

Transparency key to Zim’s wealth fund

Posted on 14 October 2014 by VRS  |  Email |Print

Zimbabwe must be transparent and accountable to its citizens with the newly established Sovereign Wealth Fund (SWF), a leading South African banker has said. Nesbert Ruwo, an investment banker said the country needs to engage its people first before it rushes to create the wealth fund.
“The key ingredients to a successful SWF include transparency and accountability. Citizens, who are the ultimate beneficiaries, need to be appraised continuously before and after a SWF is set up. Public awareness and support is of paramount importance,” he said………………………………………..Full Article: Source

Zim rushes to create sovereign fund

Posted on 13 October 2014 by VRS  |  Email |Print

Sovereign Wealth Funds have been attracting a lot of attention in recent years as more countries establish funds and invest more capital in a wide range of assets. At least US$6 trillion in assets are being held by these funds globally. But the question is, should every country set up their own and for what purpose? Is there a rationale to rush to join the bandwagon?
A sovereign wealth fund (SWF) is a fund owned by the state that is invested in various financial assets (such as shares, fixed income instruments, and properties). A SWF is a form of a national savings account with a specific purpose(s), but mainly for the benefit of its current and future citizens………………………………………..Full Article: Source

Protect, grow permanent fund for the future

Posted on 10 October 2014 by VRS  |  Email |Print

The state’s Land Grant Permanent Fund will distribute almost $600 million this year to New Mexico schools and other beneficiaries, a year-over-year increase of more than $60 million. In fiscal year 2016, we expect the Land Grant Permanent Fund and our other permanent endowment, the Severance Tax Permanent Fund, will distribute as much as $850 million in funding to benefit public schools and pay for government services.
While many New Mexicans are unaware of these benefits, without them, we would all be paying much higher taxes. As members of the State Investment Council, we ask for your vote on Nov. 4 for Constitutional Amendment 5. Amendment 5 will allow us as fiduciaries to better manage the Land Grant Permanent Fund, and should have a long-lasting and valuable impact on the state’s investment returns………………………………………..Full Article: Source

Sovereign wealth fund option to diversify Macau economy

Posted on 09 October 2014 by VRS  |  Email |Print

In recent months the government and lawmakers have been discussing creating a sovereign wealth fund. A sovereign wealth fund was also suggested as an option by the International Monetary Fund (IMF) in its July 2014 staff report. Under Article 4 of the IMF Articles of Agreement – which sets out the obligations of members regarding exchange arrangements – the IMF conducted a consultation with Macau, the first since the handover of sovereignty in 1999.
The staff report describes Macau’s economy as open and tourism dependent. Macau has no public debt and noteworthy fiscal reserves. The Macau financial system was highly commended in the report and the outlook appeared bright. Notwithstanding this, the IMF pointed out some changes that might occur in this framework in future………………………………………..Full Article: Source

Boris Johnson: Britain needs ‘gigantic’ SWF to help build new roads

Posted on 06 October 2014 by VRS  |  Email |Print

Britain’s public sector pensions should be merged to create “gigantic” sovereign wealth fund which can invest in the roads, railways and airports that “this country is crying out for”, Boris Johnson has said.
The Mayor of London said that there has been an “ontological explosion” of pension fund managers who each have “their little jaws wrapped blissfully around the giant polymammous udder of the state”. He said that pensioners would enjoy higher incomes if Britain’s 39,000 public sector funds were merged to create a “citizen’s wealth fund” which could invest in major infrastructure to help stimulate Britain’s economy………………………………………..Full Article: Source

Norway’s Central Bank to Buy Kroner for Oil Fund in October

Posted on 01 October 2014 by VRS  |  Email |Print

In an unusual move, Norway’s central bank said on Tuesday it would buy Norwegian kroner and sell foreign exchange in the market in October on behalf of the country’s sovereign-wealth fund, sending the krone higher against the euro.
Norges Bank said it would sell the equivalent of 250 million Norwegian kroner ($38.8 million) a day in October. The central bank announces on the last working day of each month how much foreign currency it will buy or sell in the following month but hasn’t bought or sold foreign currency in this way since October 2013, when it sold kroner………………………………………..Full Article: Source

Suffering Wealth and Sovereign Wealth

Posted on 29 September 2014 by VRS  |  Email |Print

The Excess Crude Account (ECA), which was set up by former President Olusegun Obasanjo under the inspiration of Dr. Ngozi Okonjo-Iweala in 2004, was the saving grace. Nigeria would have lapsed into a catastrophic economic downturn. Yet, when Obasanjo set up ECA, governors kicked against it, describing it as unconstitutional. All money must be shared, they said.
If Obasanjo had caved in, there would have been nothing to fall back on in 2009 when the crunch set in. We still make use of it till today. So much for constitionalism. ECA is, of course, not the same thing as SWF. ECA simply saves the difference between the budgeted and the actual prices of crude oil. It is a stabilisation fund, summoned when it is needed, especially by the governors who continue to wave the constitution in our face anything they crave raw cash. SWF, on the other hand, is primarily an investment………………………………………..Full Article: Source

Temasek ‘a company like no other’

Posted on 25 September 2014 by VRS  |  Email |Print

Its beginnings were modest and fraught with risk but when Temasek Holdings held its 40th anniversary dinner last night, it had become, in the words of President Tony Tan Keng Yam, “a company like no other”.
In his keynote speech, Dr Tan said the investment firm was an “experiment born out of necessity” and had transformed itself into a Singapore institution that “epitomises a culture of constant hard work and ceaseless innovation to build for the future”. Last night, plenty of well-wishers gathered to mark that singular achievement over the past 40 ground-breaking years………………………………………..Full Article: Source

PNG’s Sovereign Wealth Fund: still too many loose ends

Posted on 23 September 2014 by VRS  |  Email |Print

If it’s going to proceed with it, the government would do well to announce specific plans for the Sovereign Wealth Fund before the year is out. Since August, government ministers have hinted that we might soon see an update on the state of Papua New Guinea’s Sovereign Wealth Fund (SWF). Despite the recent parliament sitting, the government’s plans remain unclear. We wait for the answers to two important questions:
When will the Sovereign Wealth Fund be finalised and implemented? Will the operational rules and responsibilities, and the overall role of the Sovereign Wealth Fund, actually be what they said it would be at the outset? With PNG’s LNG exports now regularly reaching Japan’s shores, the government should be ready to answer these questions………………………………………..Full Article: Source

Economists release new analysis of a ‘Scottish Oil Fund’

Posted on 19 September 2014 by VRS  |  Email |Print

A new economic analysis of a potential Scottish Oil or Sovereign Wealth Fund has found that Scotland could earn the same from the fund as current revenues from North Sea oil and gas tax receipts. The new economic outlook found that Scotland could have amassed a fund worth between £73.64 billion and £147.28 billion in 24 years, the same time as the Norwegian Oil Fund has been running.
The economic analysis found that the Scottish Oil Fund would bring in an annual income of between £2.9 billion and £5.8 billion respectively in today’s prices, the same amount as current estimated tax receipts from North Sea oil and gas revenues……………………………………..Full Article: Source

Scottish oil fund ‘would be worth billions’

Posted on 18 September 2014 by VRS  |  Email |Print

A Scottish sovereign wealth fund could produce a recurring oil income worth billions to an independent Scotland, according to a new analysis. The economic outlook found that if only £1.2 billion was invested each year into an oil fund and delivered similar growth to the Norwegian Fund, then Scotland could expect a fund worth £73.64 billion in 24 years.
Rather than be directed to tax revenues, the fund would continue to grow year on year with revenues from the North Sea and investment returns reinvested, the report argued. Oilandgaspeople.com chief executive Kevin Forbes said the analysis suggested that Scotland could create ”a never-ending supply of funds derived from North Sea oil and gas” if it were to establish a national oil fund…………………………………..Full Article: Source

Oil fund post-Yes vote ‘could reach £147bn’

Posted on 18 September 2014 by VRS  |  Email |Print

Scottish independence: An independent Scotland could amass an oil fund that would “never run out” and reach £147 billion within 25 years of a Yes vote, according to new research. The SNP Government wants to set up a Norwegian style fund and a report by leading North Sea employment firm oilandgaspeople.com finds it could eventually bring in an income of between £2.9 billion and £5.8 billion - the same amount as North Sea taxes alone.
Kevin Forbes, of oilandgaspeople.com said: “The significance of this shouldn’t be underestimated. If Scotland invests now for the future, it could find itself with a never-ending supply of funds derived from North Sea oil and gas. In other words, the oil and gas money will never run out.”…………………………………..Full Article: Source

Look at Norway’s independence example

Posted on 18 September 2014 by VRS  |  Email |Print

Norway’s oil discovery happened at much the same time, but there was a significant difference in the way the Norwegians dealt with the wealth that came with the striking of black gold. The state has retained control of the Norwegian oil industry, and set up a sovereign wealth fund to use its oil income to best effect.
The fund, set up in 1990, was valued at NOK1,234bn (£119bn) on 1 January 2014 and is expected to be worth around $1 trillion by 2020. The capital itself, however, is never touched to cover state spending……………………………………Full Article: Source

Moody’s applauds Khazanah’s key role in national development

Posted on 18 September 2014 by VRS  |  Email |Print

Moody’s Investors Service has commended Khazanah Nasional Bhd over the key role it plays in national development through continuous strategic investment. It said Khazanah’s leading role in the Malaysian Airlines restructuring plan illustrated the potential impact of sovereign wealth funds on debt sustainability.
“As part of our Sovereign Bond Ratings methodology, we regard Khazanah, Malaysia’s sovereign wealth fund as supporting the country’s rating,” Moody’s said in its ‘Credit Analysis on Malaysia’ report. Khazanah, an investment arm of the Malaysian government, held assets worth RM135.1 billion (13.7 per cent of the gross domestic product - GDP) at the end of 2013……………………………………Full Article: Source

Why 1MDB is often misunderstood

Posted on 17 September 2014 by VRS  |  Email |Print

Its corporate tagline “Forging partnerships, advancing growth” is clearly visible on the hoarding boards at the site of the future Tun Razak Exchange. As work goes on unassumingly to lay the groundwork for Malaysia’s international financial district, the world is watching anxiously to see the kind of growth its master developer 1Malaysia Development Bhd (1MDB) will be advancing.
In the two years since the project has been launched, the relocation process has been smooth, the ground work is in progress, the MRT station on its site begins to take shape, and it has recently announced Lend Lease of Australia and Exim Bank of China as investors. 1MDB’s substantial energy assets have also attracted scrutiny, especially with all the talk of imminent listing…………………………………Full Article: Source

Angola’s Sovereign Wealth Fund Is Underway

Posted on 16 September 2014 by VRS  |  Email |Print

Announced in 2008, established in 2012, and receiving the final installment of its initial endowment in June of this year, Fundo Soberano de Angola (Angola’s sovereign wealth fund) finally has progressed to investing its $5 billion in assets. In a series of recent interviews, fund Chairman José Filomeno Dos Santos has been detailing how the fund’s portfolio will be diversified and answering questions about its governance structure.
The guiding principle of the fund will be to “[pursue] investments that generate long-term and sustainable financial returns” and, in turn, use that wealth “to promote growth, prosperity and social and economic development across Angola” and sub-Saharan Africa more broadly. To accomplish these goals, up to one third of the $5 billion fund will be put into alternative investments across sub-Saharan Africa………………………………………..Full Article: Source

NZ: Cunliffe unveils sovereign wealth fund policy

Posted on 15 September 2014 by VRS  |  Email |Print

A Labour Government would establish a sovereign wealth fund to invest in new businesses, including clean energy projects using dividend cash from the remaining stakes in mixed ownership model companies and higher oil and gas royalties, leader David Cunliffe says.
Mr Cunliffe this morning unveiled his party’s ‘NZ Inc’ policy which he said would “drive growth, boost clean technology and protect our strategic assets to achieve our goal of a smarter, cleaner, fairer economy”. The policy’s three key aims were to “drive sustainable growth, support the transition from fossil fuels to clean technology and enshrine New Zealand ownership of our strategic assets”………………………………………..Full Article: Source

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